MOBIS Sustainability Report 2015

1Special Theme

Quality for Customers

Growth for all

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MOBIS Sustainability Report 2015

2 3Special ThememOBiS SuSTainaBiliTy RepORT 2015

o p e n

MOBIS has published sustainability reports on its plans and progress in social, environmental and economic

performance to its stakeholders since 2010. Relying on the materiality test process, in which stakeholders

take a key part in, major sustainability issues were identified to collect stakeholder opinions on issues to

cover our performance and endeavors regarding such issues.

Reporting Structure

This report comprises three parts: corporate profile, materiality analysis, and our performance in social, environmental

and economic aspects in priority order according to the stakeholder interest level as uncovered from our materiality test.

Detailed data and information on each sectorial performance and GRi index are provided in the appendix on pp. 70-84.

Reporting Guidelines

This report was compiled in accordance with the Global Reporting initiative (GRi) G4 Guidelines.

Reporting Period

The reporting period falls on the calendar year for 2014, from January 1 to December 31. Quantitative data from a three-

year trend from 2012 to 2014 are provided, highlighting certain data regarding material issues extending to the first half

of 2015.

Reporting Scope

The report covers the business performance of mOBiS, including the headquarters, manufacturing sites, R&D center and

regional offices, with limited coverage on greenhouse gas (GhG) emissions, locally hired employees, and sales break-

down by region for overseas operations. Financial data was reported on a consolidated basis.

Significant changes to performance measurement and reporting scope

This report prepared financial data as per the Korean international Financial Reporting Standards (K-iFRS) and energy use

and GhG emissions data based on verified results.

Report Assurance

The report content has been assured independently by a third-party entity, Korea productivity center, whose assurance

statement is provided in the appendix on pp.80-81 of the report.

Additional Information

mOBiS website: http://en.mobis.co.kr

Business Report: Korea Financial Supervisory Service: http://dart.fss.or.kr

Cover Story

Symbolically, the line surrounding the globe represents mOBiS, the world’s sixth largest auto parts manufacturer, and

the arrow captures our commitment towards becoming one of the world’s top five auto parts manufacturers. The title

“Beautiful companionship” encapsulates our strong commitment to building a better future for all stakeholders, with

the highest priority on our customer value. The three-colored line metaphorically represents the passion and dynamics (red)

of mOBiS, harmony with the environment and society (green), and commitment to sustainability (blue).

About This Report

Sustainability Overview

ceO’s message 06

management System 08

corporate Governance 11

Business ethics 13

Risk management 15

Stakeholder engagement and materiality Test 17

Special Theme

Quality Overview 22

product Quality 25

Suppliers’ Quality control 28

R&D Overview 32

Green Technologies 35

intelligent component Technologies 37

Corporate Achievements

management performance 40

Win-win partnerships 44

customer Relations management 48

Social contribution 52

employees 58

environmental management 64

Appendix

Sustainability management 70


Win-Win partnerships 72



employees 75


Greenhouse Gas emissions assurance Statement 79

Third party assurance Statement 80

GRi index 82

Contents


1Special Theme

Corporate profile

Founded in 1977, MOBIS is an automotive parts manufacturer that supplies automotive modules and core parts as well as aftermarket service parts to

major global carmakers. Notably, the company advanced two notches up—from the eighth largest global OEM parts suppliers to the sixth largest one in

2014—on the strengths of its quality products and services. We will continue to work hard to further raise our rank to one of the world’s top five automo-

tive parts manufacturers, while also fulfilling our social responsibilities.

Business Domains

Module Parts Manufacturing

mOBiS wields its cutting-edge vehicle modularization

technology to manufacture and supply chassis modules,

cockpit modules and front-end modules, the three core

modules for carmakers, through the Just-in-Sequence

(JiS) process. Through collaboration with carmakers, the

advanced module parts at mOBiS are perfected from the

very initial stage of development.

Global Network

Headquarters and Production

Korea | head Office: Seoul

12 production Sites: ulsan, asan, ehwa, Seosan, anyang,

Gwangju, Gimcheon, changwon, poseung, cheonan,

Jincheon, and chungju

Overseas

16 production Sites: mBJ (Beijing mOBiS automotive parts

co., ltd.), mBJc (Beijing mOBiS chonche automotive

parts co., ltd.), mJS (Jiangsu mOBiS automotive parts

co., ltd.), mSh (Shanghai hyundai mOBiS automotive

parts co., ltd.), mWX (Wuxi mOBiS automotive parts co.,

ltd.), mTJ (Tianjin mOBiS automotive parts co., ltd.),

mal (mOBiS alabama, llc), mal-Ga (mOBiS alabama,

llc-Ga), mna (mOBiS north america llc), mBR (mOBiS

Brasil Fabricacao de autopecas ltda.), mSK (mOBiS

Slovakia s.r.o.), mcZ (mOBiS automotive czech s.r.o.),

mRu (mOBiS module ciS, ll), mTR (mOBiS automotive

and module industry a.S), min (mOBiS india ltd.), and

mmX(mOBiS mexico)

Automotive Parts Sales Network

Korea

4 logistics centers, 23 parts sales business centers,

43 parts wholesalers, and 1,976 agencies

Overseas

13 automotive parts subsidiaries, 54 branches and offices,

477 agencies, and 11,262 dealers

R&D Centers

Korea

yongin and euiwang

Overseas

u.S., china, Germany, and india

Core Parts Manufacturing

mOBiS mobilizes its all resources available to develop

core parts that enhance the driving experience and

more convenient vehicles, as well as road safety and

environmental protection. converged with electronics

and cutting-edge iT, our motors and battery systems have

boosted our eco-friendly technologies. Going forward, we

will continue to invest in technology to further solidify our

market power in green & intelligent automotive parts.

Aftermarket Service Parts

mOBiS supplies aftermarket service parts to approximately

53 million hyundai and Kia motors vehicles worldwide.

To ensure the timely delivery of parts, mOBiS has built a

cutting-edge logistics system and extensive distribution

infrastructure that manages 2.14 million auto parts in stock

for 202 automotive models, providing these service parts

at a moment’s notice and ensuring the highest level of

customer satisfaction.

Name

mOBiS co., ltd.

President & CEO

myung-chul chung

Establishment

June 25, 1977 (enlisted on the Korea Stock exchange on

September 5, 1989)

Headquarters

203 Teheran Road (yeoksam-dong),

Gangnam-gu, Seoul, Korea

KRW 36.2 trillion

6 th

500,000

KRW 56.8 billion

5.8 percent year-on-year growth from 2013

Automotive News

A total of KRW 126.5 billion funded in loans to suppliers in 2014

Distributed transparent umbrellas since 2010 to reduce the risks of car accidents

involving children on rainy days

Sales

Global OEM parts suppliers ranking in 2014

Loans extended to suppliers

Cumulative number of transparent

umbrellas distributed

22,842 employees8,170 in Korea, 14,672 overseas (11.2 percent growth from 2013)

Total workforce (in Korea and abroad)

13,715 points

Domestic: 1,976, Overseas: 11,739

Global sales network


Sustainability Overview

ceO’s message 06

management System 08

corporate Governance 11

Business ethics 13

Risk management 15

Stakeholder engagement and materiality Test 17

Special Theme

Quality Overview 22

product Quality 25

Suppliers’ Quality control 28

R&D Overview 32

Green Technologies 35

intelligent component Technologies 37



Win-win partnerships 44



employees 58


Appendix

Sustainability management 70


Win-Win partnerships 72



employees 75


Greenhouse Gas emissions assurance Statement 79

Third party assurance Statement 80

GRi index 82

Contents

6 7SuSTainaBiliTy OveRvieWmOBiS SuSTainaBiliTy RepORT 2015

Distinguished stakeholders,

i’d like to express my heartfelt appreciation for your continued support of mOBiS. everyone at mOBiS is making concerted efforts to cre-

ate sustainable future value and share this created value with all its stakeholders.

Despite the challenging business environment amid the won appreciation and fierce market competition in 2014, mOBiS achieved sig-

nificant business results, recording KRW 36 trillion in sales and KRW 3 trillion in operating profit. also, our global Oem ranking moved

up to sixth place, bringing home the honorable uSD 10 billion export Tower from the Korean government.

Reinforcing technological and quality competencies in pursuit of future growth engines

market competition intensified in the automobile industry with the growth rate of market demand for automobiles dropping for a

second year in a row. Worse still, major economies turned to protectionism amid the pandemic fear over slowing growth in the global

economy, thus building up on their entry barriers. Still, we see a silver lining behind all of this. namely, the Korea-china free trade agree-

ment (FTa) renders us an opportunity to take advantage of the world’s most populous market. also, we can expect growth in sales of

automobiles due to an oil price falling. The expanding green car market and tougher regulations on road safety measures also suggests

opportunities for mOBiS, which has been relentlessly working on related technology R&D efforts.

mOBiS’ proven technology covers the core components to virtually every sort of eco-friendly vehicle, from hybrid vehicles and electric

vehicles to fuel-cell electric vehicles. We have also strategically focused on perfecting our technological competitiveness in driver as-

sistance systems, such as lane keeping assistance systems, safety distance controls, autonomous emergency braking, and parking as-

sistance systems. as such, mOBiS is developing core technologies for eco-friendly and intelligent driving technologies to take the lead in

the next-generation automotive parts technological advancement.

at the same time, we also work hard to harness our competitive edge in product quality. While preventing quality issues at source, we promote

inter-departmental collaboration in addressing quality issues in order to ensure timely and accurate decision-making and responsiveness. We

are also advancing our manufacturing systems to meet the highest global manufacturing standards for the greatest customer satisfaction.

Practicing socially responsible management through fundamental restructuring

employee competencies constitute corporate sustainability. mOBiS employees are bound together and have the power to translate their

beliefs into action. These strengths will allow us to sustain continued growth. in support of this, the company practices system-based

business activities, while promoting real-time communication across the board. everyone at mOBiS faithfully abides by the basic rules

and principles of the company.

as a result, mOBiS tirelessly enhances its quality and technologies through business innovation to realize the highest level of customer

satisfaction, while supporting its business partners to achieve mutual growth. at the same time, we remain committed to community

outreach activities at home and abroad to be more engaged with local communities where we operate. Our employees possess a high

level of ethical awareness as responsible members of society. as an ardent proponent to the national drive for reducing greenhouse gas

emissions, we participate in Korea’s carbon reduction initiatives. We also have a dedicated team aimed at safety and environmental is-

sues to ensure systematic safety and environmental management. We are also an active practitioner of corporate social responsibility

(cSR) management in a number of activities while developing eco-friendly automotive parts technologies.

mOBiS will continue to strengthen its internal competencies to secure future growth drivers as it constantly develops source technolo-

gies and quality innovation to lay the foundation for sustainable growth. at the same time, everyone at mOBiS will do their utmost to

contribute to higher customer value and cSR initiatives.

may 2015

Myung-chul Chung

President & CEO MOBIS

MOBIS tirelessly enhances its quality and technologies through business innovation to realize the highest level of

customer satisfaction, while supporting its business partners to achieve mutual growth. At the same time, we remain

committed to community outreach activities at home and abroad to be more engaged with local communities where we

operate.

CEO's Message


Guided by our business philosophy which aims to realize the dream of mankind by creating a new future through

ingenious thinking and constantly challenging new frontiers, MOBIS shares its vision and five core values with its

employees. In doing this, our 2020 CSR mid- to long-term strategies that were aligned to our philosophy and vision allow

us to create shared value with stakeholders for mutual growth.

manaGemenT SySTem

Business Philosophy

Since its foundation, mOBiS has been faithful to the underlying spirit of a stalwart business philosophy. not content to rest on its pres-

ent accomplishments, the company works arduously to reach its full potential for the realization of future possibilities, while practicing

an unlimited sense of responsibility for the greatest satisfaction of stakeholders as it implements social outreach activities to contribute

to a better society for everyone.

Vision

By supplying top-quality products and services, mOBiS aims to become a lifetime partner in automobiles and beyond, realizing sustain-

able mobility together for a better future. To that effect, mOBiS developed three-year objectives and channeled its resources to realize a

mid- to long-term corporate vision of becoming one of the world’s top five automotive parts suppliers by 2020.

Core Values

The five core values—customers, an enterprising spirit, collaboration, people, and globality—provide a guideline for all mOBiS employ-

ees to steer their behavior and decision-making in order to realize the company’s business philosophy and corporate vision. conforming

to the company’s commitment to building an enterprising, collaborative and creative culture, where respect is dependent on talent and

customer value, 5,931 domestic and international mOBiS employees took part in a Group-wide core value & engagement survey (cveS)

in 2014.

CORE VALuES

BuSINESS PHILOSOPHy

Realizing the dream of mankind

by creating a new future through

ingenious thinking and continuously

challenging new frontiers

1 T echnical advancement, top-quality

products, enhanced customer credibility,

active customer communication

2 Environmental protection, social

contribution activities, and active

communication with local communities

3 Fair and transparent transactions,

information sharing and technology

transfers

4 Compliance with all laws and regulations

where we operate, and responsible

management practices

5 Transparent & stable management and

maximized value for shareholders and

investors

6 Fair evaluations and compensation,

support of competency-building, safety

at workplaces, generous benefits and a

pleasant working environment

7 Supporting global initiatives to mitigate

climate change, enhancing corporate

competitiveness by effectively addressing

climate change

providing sustainable

value to all stakeholder groups

CSR VISION

local communities 2

Growing alongside local communities

employees 6

Most in demand employer

Governments around the world 4

Transparent management

VISION

Group-wide

Together for a better future

automobiles

Global Top 5: a lifetime partner in

automobiles and beyond

customers 1

Sustainable mobility

partner companies 3

Reliable partner

Shareholders & investors 5

A company to believe in

all stakeholders 7

A leader in addressing climate change


Corporate Social Responsibility (CSR) Management

under the 2020 cSR implementation Strategy of becoming a sustainable value provider, mOBiS actively engages in a number of cSR

management activities in line with its cSR strategies. mOBiS has classified stakeholder groups and selected goals and action plans dif-

ferently within each group, while organizing a dedicated cSR Team for the seamless collaboration on a company-wide level.

CSR Implementation Strategies

Social Responsibility Charter

mOBiS understands that reliable management, environmental management and social contribution constitute the fundamentals of

business activities and promises to continuously practice them. in addition, we recognize that fulfilling the principles of social responsi-

bility will be a lasting source of growth in the long term and will make sure it benefits the staff, suppliers, shareholders, customers, com-

munities and all of society.

Social Responsibility Charter

Ownership

as of the end of 2014, mOBiS’ outstanding shares totaled 97,347,837 shares (including 97,343,863 common and 3,974 preferred

shares). The largest shareholders and persons of vested interest held 30.17 percent of total shares, while the aggregate number of

shares held by minority shareholders below 1/100 ownership of the company’s equity capital accounted for 58.57 percent of total

shares for the same period.

Ownership Structure (as of December 31, 2014)

Composition and Operation of the BOD

The board of directors (BOD) of mOBiS is at the top of the company’s decision-making hierarchy regarding all management issues, speaking

for its stakeholders and keeping in check all management activities in a farsighted perspective. as of the reporting period (end of 2014), the

BOD consisted of nine directors, including four inside and five outside directors. as the automotive parts business requires prompt decision

making on large-scale investments, the ceO concurrently takes the chair of the BOD to ensure timely decisions, but the company runs an

Outside Director Recommendation committee to guarantee the independence of BOD operations from the company’s management board.

in conformity with the related regulations, outside directors take up the majority of the BOD and outside directors are appointed only

after the Korea exchange inspects the legal qualifications of each candidate based on a submitted Qualification certificate as well as

the vested interests in the company before approving their appointment. Of the three BOD subcommittees, the ethics committee and

audit committee are comprised solely of outside directors for more neutrality in their activities to keep management in check.

in 2014, the BOD convened 11 meetings to deliberate and resolve 33 agenda items and reports. The attendance rate for outside directors

stood at 93 percent that year. Remuneration is made to board members within the limits approved by the general shareholders’ meeting

(GSm) based on performance review results. in 2014, a total of KRW 6.63 billion was paid out from a budget of a KRW 10 billion ceiling.

MOBIS promotes a transparent and healthy corporate governance to coordinate the different interests of diverse

stakeholder groups and to ensure that all management activities are carried out to the letter of the law. At MOBIS, outside

directors account for the majority of the board to ensure that all stakeholder opinions are heeded independent from

management, with subcommittees supporting BOD operations with their expertise in their respective areas.

cORpORaTe GOveRnance

International investors

Domestic institutional investors

Domestic individual investors

Largest shareholders

Treasury stocks

total

Common

44,450,664 (45.7%)

16,762,705 (17.2%)

4,956,359 (5.1%)

29,367,519 (30.2%)

1,806,616 (1.8%)

97,343,863 (100.0%)

Preferred

187 (4.7%)

547 (13.8%)

3,240 (81.5%)

-

-

3,974 (100.0%)

shares

We facilitate the self-realization of our

staff and establish mutually beneficial

relationships with our suppliers.

We build sound labor-management relations

on the basis of a corporate culture of respect

and trust.

all employees share and practice a spirit of service

and eco-friendliness.

We assist suppliers in strengthening their global

competitiveness with mutual cooperation and

green partnerships.

We raise shareholder value and deliver

an environment of trust and satisfaction

to our customers.

enhance shareholder rights and benefits by

creating economic and social values.

protect customer privacy and boost customer

satisfaction by providing the best products and

services.

collect opinions of shareholders and customers

in all business operations and share the value of

sustainable growth.

As a responsible member of the global

community, we contribute to the shared

prosperity of humankind.

Sharing and caring with our neighbors through

various social contribution activities.

comply with global environmental regulations

and agreements and become actively involved in

environmental conservation.

enhance mutual understanding and contribute

to the development of a global society through

vigorous cultural exchanges.

value creation through partnerships

Future value

Shared value

Stakeholders

“The Sustainable Value Provider”


Remunerations to directors (as of Dec. 31, 2014)

Subcommittees

under the BOD are three subcommittees—an audit committee, ethics committee and Outside Director Recommendation committee—

all of which support BOD activities with their expertise in their respective areas under their own authorities and functions to monitor

management activities in a transparent and responsible manner.

The ethics committee is responsible for company-wide ethics practices. it oversees compliance program practices, transactions with

persons/entities that have a vested interest, the company’s business ethics and cSR policies, and institution/amendments and enforce-

ment of the code of ethics. in 2014, the committee gathered eight meetings to review the cSR and ethical management performance

and plans. it also approved agenda items regarding financial transactions with the Group’s financial affiliates according to the provi-

sions of contracts and the limits on the transactions with the largest shareholders.

The audit committee audits general management activities and accounting practices. The committee has the authority to demand

directors to report on operations and to examine the company’s financial status and operational practices. it convened a total of four

meetings in 2014 to deliberate the audit results on the company’s financial statements, and review internal accounting control system

operations.

The Outside Director Recommendation committee consists of both inside and outside directors and has the right to recommend can-

didates for outside director positions. The recommended candidates are approved by the BOD before being appointed by the GSm. in

2014, the committee held two meetings to serve its function and elected their chair.

BOD Composition (as of March 31, 2015)

Ethical Management Organization

Our ethics charter, code of ethics and ethical Behavioral Guidelines for employees provide the behavioral guidelines to our employees.

We have also distributed a code of ethics for suppliers in promotion of business ethics throughout our entire supply chain.

comprised solely of outside directors, the ethics committee monitors companywide ethics practices to ensure a more transparent and

ethical corporate culture. This is supported by the corporate audit team, which conducts auditing on a regular basis, and by the cyber

auditor, which is an online inspection instrument open to all stakeholders. in addition to the regular risk management system, we are

vigilant to internal ethics risks with an early detection system and other internal warning systems in place. procedures for the internal

control system have been standardized in order to establish fair transactions and subcontracting procedures have been computerized,

from contracting and bidding to procurement and pricing systems, in order to preemptively steer clear of any irregularities, forming the

cornerstone for win-win partnerships with suppliers.

The business ethics indicators were developed in 2013 to evaluate the level of ethics practices by stakeholders, with the results now be-

ing reflected in our ethics training programs.

Business Ethics Management System

Ethics Training & Campaigns

mOBiS operates a variety of ethics training and campaign programs to promote employees’ proactive ethical practices. The On-Site eth-

ics Training classes provide ethical training sessions to employees at plants and other business sites. at each division level, ethics lead-

ers are appointed to discover ethics dilemmas that employees run into in their job fulfillment, while finding solutions to various ethical

dilemma cases in order to encourage employees with greater ethical practices. The solutions are then reflected in ethical training lesson

plans. also, all new employees are obliged to receive ethics training to raise their ethical awareness.

Furthermore, top management announces its commitment to companywide ethical management, and the company runs a campaign

before and during traditional holidays to prevent employees from unethical transactions with stakeholders. a code of ethics Guidebook

was also published to help employees familiarize themselves with the company’s code of ethics. The guidebook not only sets forth the

provisions of the code of ethics, but provides case studies on ethical dilemmas that employees often encounter in the course of their

day-to-day job duties.

As a signatory to the uN Global Compact (uNGC), MOBIS fulfills its corporate social responsibilities and runs education

programs to help employees internalize business ethics in their behaviors. Moving forward, MOBIS will continue with its

ethical management practices as a highly trusted company.

BuSineSS eThicS

Inside

Outside

Name

mong-koo chung

eui-sun chung

myung-chul Jung

Byung-chul choi

Tae-woon lee

chan-wook park

Byung-joo lee

Woo-il lee

Ji-soo yu

Responsibility/Additional Job

chairman & ceO

vice chairman

president & ceO

chief Finance Officer

Senior partner, The One law Firm

ceO, p&B Tax affairs consulting

advisor, Bae, Kim & lee llc

Dean, Department of mechanical and aerospace engineering, Seoul national university

president, Kookmin university

Functions

member of audit committee

chair of audit committee




chair of ethics committee

member of ethics committee




member of Outside Director Recommendation committee

chair of Outside Director Recommendation committee


member of Outside Director Rec-ommendation committee


2014 6,625

2013 6,754

2012 6,527

6,000 8,000unit: KRW million 0 2,000 4,000

ethics charter

code of conduct

ethical Behavioral Guidelines for employees

code of conduct ethics committee

audit Team

cyber auditor

Risk management system

early detection system

Code of Ethics Suppliers Organization Internal Warning System

Business Ethics Management System


Risk Management Organization

mOBiS has had a dedicated risk management team in place since 2012 for the systematic management of various risk potentials that

could have an impact on its growth and sustainability. The Risk management committee, supported by its subcommittees in charge of

specified countermeasures to respective risk types, prepares responsive measures led by the ceO. The Risk management subcommittees

monitor risk factors and carry out preliminary responses round the clock. in the event of a risk requiring a companywide response, we

also have in place a company-wide response process and hotline to report to top management for prompt action.

Risk Control Tower mOBiS set up a Risk control Tower in 2013 in a bid to ensure an advanced risk control system. The Risk control

Tower controls company-wide risk factors on a real-time basis and takes immediate countermeasures to stop company-wide spreading

in the event of a risk. major development and issues are reported to the risk management board and related department to support

timely decision-making. additionally, we have developed a global situation monitoring system that integrates the control towers of

ccTvs at all of our overseas sites and fire alarm controls. at the same time, we have in place a system for integrated management of

company-wide major management information so that all employees are on the same page when it comes to preparedness to risk fac-

tors. Going forward, mOBiS will continue its risk management efforts to perfect its company-wide risk communication process.

Business Ethics Training Performance

Information Security

mOBiS runs an integrated information security control system that encrypts all documentation and information in accordance with

related regulations. To protect its confidential information, the Technical R&D center applies stricter standards using vDi and mDm

to information and database management. additionally, mOBiS has a number of programs to raise its security practices. in 2014, we

selected some of our own sites as well as suppliers’ sites that require intensive security control to give them on-site guidance on secu-

rity practices. We then offered training workshops to the security staff of suppliers and online sessions to our own employees to raise

awareness concerning information security management. moving forward, we plan on standardizing security requirements at all our

business sites as part of our revamped on-site security control practices.

Sexual Harassment Prevention Programs

mOBiS promotes equal opportunity and treatment and abides by Korea’s Sexual equality employment act. We also implement sexual

harassment prevention activities to protect human rights at work. in fact, a sexual harassment ombudsman center was established

under the control of the corporate culture Team in 2014. each division is now appointing their own ombudsman to prevent any misde-

meanors by system. mOBiS will continue its endeavors to keep its premises clear of any sexual harassment.

Constant monitoring and responsiveness are imperative to effective risk management. MOBIS runs a risk management system in

order to preemptively detect and respond to diverse risk factors so that it can set the groundwork for sustainable growth.

RiSK manaGemenT

Offline training

Online training

total

ethics

Fair trade

information security

Sexual harassment

compliance

No. of trainees

3,246

884

3,843

2,930

633

11,536

Hours of training

4,869

1,366

3,843

4,841

5,064

19,983

Risk Control Tower

No Bribes, No Gifts on Traditional

Holidays Campaign CEO’s Message on Business Ethics

PEST

Risk Subcommittee

Political

Risk Subcommittee

Disaster

Risk Subcommittee

Operational

Risk Subcommittee

Risk Management Committee

Risk Management Organization

head of planning Group

(risk management)

CRO(Chief Risk Officer)

• VDI(VirtualDeviceInterface):virtualdesktopsecuritysolutions

• MDM(MobileDeviceManagement):mobilesecuritysolutions

• PEST:political,economic,socialandtechnology

• Astherewere10ethicscodeviolationsbyouremployeesin2014,MOBISisnowsteppingupitsin-houseethicstrainingtopreventunethicalbehavioronthepartofemployees

in the future.


Key Risk Management

at mOBiS, key risk factors are divided into two groups, each of which requires different approaches. First is the indicator-based manage-

ment approach. By analyzing trends and examining causes using the key risk indicator (KRi) monitoring system, risks are classified into

four stages of caution, danger, warning, and severe based on analysis results to different countermeasures. The other is a manual-based

management approach, which suggests countermeasures for different situations in order to ensure a prompt response to emergencies.

Based on reviews to determine the seriousness, possibilities, impact, and risk factors of high importance, each is defined as a key risk

factor for intensive monitoring and responsive measures. Well aware of the growing needs for managing foreign currency risks amid the

latest volatility in the global financial markets, we have recently intensified our monitoring of emerging markets’ currencies.

10 key risks

2014 major risk management performance

Major Risk Management and Response by Type

mOBiS analyzes potential risk factors that have an impact on its business, including major developments in politics, economics, industrial

and market environments, as well as geopolitical issues and reports, all of which it presents to top management. Financial risks are also in

control, reporting every major issue to top management. While controlling the exchange rate exposure risks arising from foreign currency-

denominated bonds and debts, we also regularly monitor and assess financial stability indicators, such as net cash flows and debt ratio.

Social/environmental/regulatory risks are also under our control. We have in place a dedicated monitoring program to establish a compli-

ance program within the organization and have completed a material compliance management System (mcmS) and GhG inventory for ef-

fective responses to global environmental regulations and climate change. in order to hedge operational risks stemming from irregularities

or errors in business activities due to human, process or system failure, we operate a web-based risk management system that allows us to

timely detect risk factors and minimize their impact.

Different scenarios for a range of risk factors were also examined to minimize the damage from unpredictable risks such as natural disas-

ters. an interdepartmental collaboration network is also in place to deal with situations companywide in the event of any emergencies.

MOBIS defines its CSR management as the process of communicating with stakeholders to achieve shared value. Therefore,

our endeavors are purported at contributing to the sustainable growth of society and the nation as well as achieving high

customer satisfaction while protecting the environment.

STaKehOlDeR enGaGemenT anD maTeRialiTy TeST

Stakeholder Groups

mOBiS classifies its stakeholders into eight groups and maintains different channels for communication with all of them.

Communication channels by stakeholder group

Category

Major business environment

Natural disasters

Safety/Environmental

Foreign exchange

Global economic growth rate

auto industry

Regulations

Geopolitical risks

heavy rain in the southeastern part of Korea

Safety/environmental practice checks

Description

intensive monitoring and outlook on foreign exchange rate volatility- Strong won/weak yen undermining Korean exporters’ competitiveness and emerging markets’

submerging currencies

adjusting the global economic growth rate outlook and monitoring economic issues in emerging markets

monitoring the 2h 2014 global auto industry outlook and major issues in the auto industry of each market

Stricter regulations and the impact on our business and countermeasures- Responses to U.S. regulations on conflict minerals, the new consumer protection laws of

Saudi Arabia, and China’s anti-trust laws

Responsive measures to the escalating iraqi civil war and Gaza conflict

Getting a grasp of the damage of heavy rains to agencies in the region

checking and improving safety, health, environmental, fire prevention, and disaster control practices at domestic and international premises

Indicator risks

01. Commodity price hike

02. exchange rate fluctuation

03. undermined stability in the quality control of new products

04. falling backlog order of core components

05. failure in retaining core talents

Manual risks

06. natural disasters

07. human failure

08. suspension of component supplies from partner companies

09. leakage of confidential technology

10. massive recalls

complete carmakers and

Oem part suppliers

Korea: 8,170,

Overseas: 14,672

Korea: 885 companies,

cTO Forum: 152 companies

Korea: 1,976 dealerships, Overseas: 477 agencies,

11,262 dealers, car shops, and end users

institutional investors, individual investors,

domestic and international credit rating agencies,

and cSR rating agencies in relation to investors

administrative organs,

constitutional institutions,

local governments and associations

Korean and international media,

cSR associations, cSR regulators,

and technology forums

local governments,

social and environmental nGOs

Production and sales policies, shared direction

on product development, joint projects, quality

& technology capabilities tests, and market

trend monitoring

Employee satisfaction surveys, company-wide

corporate culture assessments, CSR awareness

surveys, assessments on employee awareness

of business ethics, and Cyber Auditor

Regular meetings, executive-level conferences,

seminars for CEOs of suppliers and for

suppliers of overseas subsidiaries, and CTO

(chief technology officers) Forums

Agency policy seminars, council meetings for

executives, and customer satisfaction surveys

Non-deal roadshows (NDR), disclosures,

general annual shareholders’ meetings, and

CSR evaluations

Responses to public policies and institutions,

and joint projects

Brand recognition surveys, CSR communication

activities, and industrial-academia R&D

alliances

Social outreach partnerships (MOBIS Forest/

Junior Engineering Academy/Transparent

Umbrella Campaigns)

Complete carmakers/OEM part suppliers

Employees

Business partners

Customers (dealers/consumers)

Investors

Government/Associations

Media/Academia/CSR agencies

Local communities

• CTO:ChiefTechnologyOfficer

• NDR:Non-DealRoadshow

• CSR:CorporateSocialResponsibility

19Special Theme18 mOBiS SuSTainaBiliTy RepORT 2015

Materiality Analysis

mOBiS has run extensive stakeholder surveys and media analyses to assess key sustainability issues. in 2015, we analyzed 22 key issues

to select eight priority issues that have a significant impact on the business and are of high concern to stakeholders. The 2015 mOBiS

Sustainability Report covers our performance and plans on these eight material issues.

Media Analysis We reviewed 1,982 news articles covering mOBiS in 2014 to weigh their significance by the categories of articles,

influence of the media, and exposure to media coverage. positive issues were connected to customer satisfaction, the company’s techni-

cal competencies in eco-friendly auto parts and components, R&D infrastructure, and overseas production networks. negative coverage

was mainly about the transaction practices, genuine parts, and alternative parts certification.

Stakeholder Surveys mOBiS surveyed 2,214 stakeholders in eight groups—1,536 employees and 678 external stakeholders—

on their awareness of the company’s cSR management in order to identify key sustainability issues. The number of respondents was

increased by 1,000 people from the previous survey in order to enhance the survey credibility of the results. The findings showed that

77.0 percent of respondents thought sustainability issues were “important,” while 51.3 percent of them answered that the company

was either “outstanding” or “excellent” in its sustainability performance.

Stakeholder surveys

Top 8 priority issues identified from materiality analysis

0 2

S p e c i a l T h e m e

Special Theme

22 Quality Overview

25 product Quality

28 Suppliers’ Quality control

32 R&D Overview

35 Green Technologies

37 intelligent component Technologies

mOBiS adds value to automobiles with its product technologies that respect humanity and the environment.

The quality of products mOBiS makes is an uncompromising value that the company pursues for the sake of

its customers. To that end, we make constant investments and innovation in our research and development

for future technologies.

19Special Theme

Issue

1.Global top technology competencies

2. Achieving the highest possible quality of products

3. Mutual growth

4. Risk management

5. Increasing the order backlog from global customers

6. Human resources development

7. Health and welfare

8. Social Contribution activities

Page

32~38

22~29

44~47

15~16

43

60

62~63

52~57

Scope

internal

internal/external

external

internal

internal

internal

internal

internal/external

Stak

ehol

der c

once

rns Key report area

(Top 67-100 percent level of priority)

Business impact

8

76

4

5

3

2

1

important 38.8%

Good 39.0%

normal 19.8%

Key sustainability issues significance

MOBIS’s Sustainability Management

not at all 0.4%

not good1.3%

very important38.2%

excellent14.2%

Outstanding37.1%

not so important 2.8%

insufficient8.4%


We strongly believe that the best in-class quality of products is the greatest value we can

offer to our customers as an auto parts maker. By furthering innovation throughout the

entire life cycle of products, from design to manufacturing, we continually support our

business partners with their own quality innovation. Customer trust and our passion for

higher quality propel us forward to achieve the highest customer satisfaction.

1 chassis module line at the alabama plant

2 Front-end module line at the asan plant

3 audio video navigation (avn) line at the Jincheon plant

4 motor line at the chungju plant

1

2

3

4

Back to Basic Principles


Quality is the underlying and uncompromising value of any automobile throughout

its life cycle. mOBiS never neglects even the smallest parts or components because

every single item constitutes an important part of a car’s body. mOBiS has estab-

lished a process that meets the highest global standards, covering the entire process

of products, from design to manufacturing. as our suppliers’ products play a pivotal

role in our quality control, we always support their quality improvement initiatives.

customer feedback is also taken into consideration in our constant quality innova-

tion. The overriding value at mOBiS is our unwavering passion and commitment to

improving the quality of our products to complete perfection.

QUAlITy OvERvIEw

At a Glance

217 meetingsNumber of daily quality meetings presided by top management during the year

20 %Initial quality study results improvement rate against 2013 results

46 % , 54 %CS 1 million index improvement rate against 2013 results (domestic/overseas)

93.6 %2014 plant operations ratio (domestic)

Technological advancement and quality level are in proportion with one another. The latest advent of high-tech vehicles

were backed by the highest advanced quality level. The mOBiS Quality Research institute focuses on perfecting the qual-

ity of products by leveraging its initial quality control know-how. We listen to the customer and market demands in com-

mercializing newly developed technologies to verify the completion to perfection of our design quality and approve the

actual process to stabilize the initial quality control of mass production. under the belief that customers are the ultimate

standard for our quality control, our overseas quality control centers in the u.S., china, india, Germany, and Korea help us

meet the highest standards and demands for international clients in respective areas.

Interview

Lee young-Geon,

Director,

Quality Research institute

Client-oriented Quality Management

With our quality management practices, the primary goal is to exceed client ex-

pectations. To that effect, we make strenuous efforts to realize the highest quality

products in line with our four values: realizing defect-free quality, ensuring the

highest possible customer satisfaction system, establishing processes in line with

global standards, and reinforcing our suppliers’ quality competitiveness. By pro-

actively addressing client demand, we swiftly handle all requests and complaints,

strengthening our clients’ trust in our impeccable quality control.


Quality Management System (QMS)

mOBiS tirelessly pursues the highest possible quality levels, engaging in all-out

quality innovation initiatives. in 2002, it was the first company in Korea to earn the

iSO/TS 16949 certificate—the quality management system (QmS) for international

carmakers—on all its global operations, as well as poised to achieve zero-defects.

in 2014, the company completed the iSO/TS 16949 QmS certification at 37 of its

manufacturing plants around the world. We have also innovated the prevention

control system to prevent quality issues at source. as such, our production lines

have met all global standards.

Quality Management System (QMS)


Zero-defect engineering

emotional engineering

value engineering

Customer Satisfaction

Client Demands

Quality assurance

packaging

Shipments

manufacturing

Design

initial Quality control

mass production Quality control

Quality assurance

Constant improvement to

the QMS


Top-quality products are the ultimate goal of all manufacturers to ensure the greatest customer

value. Based on its quality management system (QmS), mOBiS further enhances the quality of its

products through strategic operation of its production R&D center and implementation plans. The

field-oriented, system-based management practices ensure advanced products tailored to different

needs of clients from different markets.

PRODuCT QuALITy

Field-oriented Prevention Frameworks

mOBiS has in place field-oriented frameworks for preventing defect risks such

as an early Warning System, defective parts tracking systems, and human error

prevention systems. any system failure triggers prompt counteractions, especially

with the QR code, which is instrumental in preventing the mix of different parts

and components on the assembly line. The main processes of core components are

automated to minimize human errors in the process of assembling and processing

all parts.

additionally, intensive production line checking has also improved field practices. in

2014, our top management made a total of 46 sessions (28 in Korea and 18 over-

seas) of checking to enhance the quality and operation ratios. in particular, sup-

pliers who showed repetitive quality issues were subject to on-site inspection and

troubleshooting sessions to further enhance our quality level on the supply chain.

46 timesNo. of times top management walked around plants in Korea and overseas in 2014

2,695 modulesNo. of modules manufactured in 2014 for 30 different car models

At a Glance

System-based Management for Quality Improvement

mOBiS’s Quality council, presided over by top management, ensures the system-

atic management of quality innovation. eachQuality council meeting is led by

the ceO and relies on real-time monitoring results using the company’s executive

information System (eiS), which helps enhance operational efficiency of meetings

and induces effective improvement measures. These monthly meetings check on

the progress of quality innovation drives and share quality innovation tips, while

also consulting future directions for innovation. The agenda items discussed and

deliberated on in the meetings are reflected in company-wide quality innovation

drives. in 2014, a total of 217 such meetings were held. Going forward, mOBiS will

continue to swiftly addressimprovement measures and solve problems with highly

tuned plans.

On-site inspection Daily Quality council meeting

CS 1 million Index

12,000

9,000

6,000

3,000

0

unit: cases

• TheCS1millionindexisamarketqualityindicatorthatstandsforthenumberofclaimsmadeforevery1

million vehicles in the first 90 days of ownership.

• Figuresfrom2012and2013werecorrectedfromthepreviousreport,asthereweresomedataerrors.

5,533

7,854

2,948

2012 2013 2014

2,964

46%

11,694

6,372

54%

RS 1 million Index

20,000

15,000

10,000

5,000

0

unit: cases

• TheRS1millionindexisamarketqualityindicatorthatrepresentsthenumberofclaimsmadeforevery1

million vehicles in the first 10-12 months of ownership.

• Figuresfrom2012and2013werecorrected,asthereweresomedataerrorsinthepreviousreport.

11,072

13,561

8,971

2012 2013 2014

5,851

47%

17,831

11,918 25%

Initial Quality Study (IQS) Vehicle Dependability Study (VDS)

• TheIQSshowsthenumberofproblemsper100vehiclesexperiencedinthefirst90daysofownership.

40

30

20

10

0

unit: points

32.333.2

26.5

2012 2013 2014

25.9

20%

19.9

24.7

-7%

60

45

30

15

0

unit: cases

• VDSindicatestherateofproblemsper100vehiclesexperiencedinthefirstthreeyearsaftermarket.

47.6

54.6

35.2

2012 2013 2014

38.8

18%

35.536.9

5%

Korea Overseas Korea Overseas

mOBiS industry mOBiS industry

Quality Improvement Performance

mOBiS improved its cS 1 million index, which stood at 5,533 in Korea and 6,372

overseas in 2013, by 46 percent 54 percent, each to 2,964 in Korea and 2,948

overseas in 2014. its iQS rating in the american market also improved 20 percent

to score 25.9 points for the same year. These improvements, in turn, stabilized our

product quality level, with our plant operation ratio improving from 89.5 percent in

Korea and 89.1 percent overseas in 2013 to reach 93.6 percent in Korea and 95.2

percent overseas.

Mid- to Long-term Quality Improvement Plans

mOBiS strives to reflect client voices in its product quality innovation, as well as

quantitative improvements. its test track in Seosan is a case in point. This is a very

rare case for an Oem part supplier to have its own test track. mOBiS constructed

this track in order to ensure distinctive quality control for its clients. When com-

pleted in 2015, it will be equipped with a testing system run by an excellent team

of test experts. its vehicle test conditions will further enhance the quality of our

products.

• TheEISwas initiated in2014torealizeamoresystem-basedmanagementplatform. Itassists inraising

company-wide productivity and management efficiency by utilizing automobile parts, purchase, quality con-

trol, and R&D data.


Quality-First Production System

in coping with the rapidly changing global market environment and technology

advancement, mOBiS is reinforcing its manufacturing competitiveness, and the pro-

duction R&D center is at the center of these endeavors for quality-first production

systems. To that end, we have set forth three key initiatives as follows.

First, we will stabilize the operation of new plants early on to strengthen our pro-

duction capacity. verification has also been tightened at the iQS and preparation

stages to steer clear of quality issues at the commercialization stage. also under

way is a movement to raise operation ratios through the stable operation of pro-

duction facilities.

Second, we aim to achieve zero-defect production quality to achieve productivity

innovation. mOBiS runs periodic process reviews to strengthen the technological

competitiveness of its overseas plants and suppliers, while training employees to

improve their quality level.

Finally, we will secure the core manufacturing technologies as our future competi-

tiveness. To that effect, a mold factory is currently under construction within our

Gimcheon plant to enhance the precision of our mold products. By benchmarking

global best practices, we will ensure the optimal mold design and manufacturing

technologies.

Boosting Overseas Quality Centers’ Functionality

mOBiS controls all quality issues on its overseas operations through its overseas

quality control centers in major strategic auto markets. The overseas quality control

centers carry out quality innovation activities tailored to local client needs and mar-

ket demands, and are reinforcing their capabilities for on-site troubleshooting and

new vehicle tests. We plan to expand more centers overseas in strategic markets in

South america and the middle east in order to offer localized quality services and

the prompt dealing of quality issues.

Design Quality

another important part of our quality control involves the design quality to

achieve higher customer satisfaction. While analyzing the quality issues of new

car models to improve their weaknesses, we also have in place a dedicated test

team to enhance software design competencies. The DFSS and DFmea have been

supplemented by TRiZ to prevent quality issues in the designing stage and to pre-

vent recurrence. also under way are various activities to heighten product quality.

common design competencies have been fortified to further the robustness of our

products. Durability tests of our products on vehicles and under extreme conditions

were increased to detect and make up any potential risks at source.

Preliminary Checks for Technological Perfection

The accelerated advancement of technologies has extended the scope of qual-

ity consideration of vehicles to safety and convenience. To that effect, telematics

equipment has become a critical factor for every automobile, accounting for 35

percent of all auto components.

mOBiS faithfully abides by all international standards in the design and mainte-

nance of its telematics equipment and software. in 2010, we set up a task force

team to prepare for the increased use of telematics components and prepared for

obtaining the iSO 26262 certificate, the international standard for the safety of au-

tomotive functionality. as a result, we were able to satisfy all 543 requirements—

the first company to do so in the world—to acquire the certificate on our airbag

control units (acu). in 2015, we are preparing for the same certificate on 19 of

our products. We will continue to enhance customer safety and convenience by de-

veloping an integrated development process that meets the highest international

standards, including the iSO 26262.

3D Printers for Higher Design Quality

mOBiS adopted a three-dimensional (3D) printer as early as 2002 to review the

feasibility of design, or the design and functionality of new models at the product

planning stage. using 3D printers for prototypes saves product costs and develop-

ment periods compared to traditional mold-based prototypes. it also allows fast

tests and improvements. For instance, the driver’s seat module costs only one-

fourth of a mock-up in a period of only half the molds or mock-ups. The saved time

and cost facilitates prototype test procedures, allowing repetitive modifications to

design plans to correct any design errors prior to mass production. Therefore, we

plan on further expanding the scope of use and verification of the 3D printer.

Pilot Module Center

The pilot module center is a facility for testing the quality of new modules for new

car models before mass production to ensure the initial quality of pilot modules.

mOBiS constructed this center in 2009 on a 4,297m2 site at the hyundai-Kia mo-

tors R&D center. The prototype modules manufactured using commercialized com-

ponents at the center help verify the quality of used components, while enhancing

the accuracy of design plans. The efficiency and appropriateness of facilities and

techniques are verified for stability in the initial mass production stage and higher

quality performance. Before a product is commercialized, the center trains opera-

tors of the production lines to help them sharpen job skills to ensure the quality of

assembly. in 2014, the center manufactured 2,695 modules for 30 car models.

Pilot Module Production by year

Production Support to Client Companies (Preparing for New Models)

2015

2014

2013

2012

2011

ISO26262

mDpS(aSil D),eSc(aSil D)

acu(aSil D),SpaS(aSil B)

Scc(aSil B),lKaS(aSil B)

-

A-SPICE

preparing for level 3

icS product and development processes (level 2)

-

-

CMMI

Regaining the level 3 certification (3-year term)

-

-

Obtaining level 3 certification on R&D center software development teams

International Standards Progress & Plans Overseas Quality Control Centers

FrankfurtSep. 2010~

DelhiJuly 2014~

Los AngelesSep. 2010~

ShanghaiSep. 2010~

2014

2013

2012

340

259

297

unit: cases 0 100 200 400300

2014

2013

2012

2,695

30

1,868

22

1,551

21

0 1,000 2,000 modules car models

• DFSS(DesignforSixSigma)isaqualityinnovationtechniquethatreflectschangesinthebusinessenviron-

ment and customer demand in R&D activities. mOBiS performed a total of 38 tasks in 2014.

• DFMEA(DesignFailureModeEffectAnalysis) isabusinessprocessforraisingthe initialquality levelby

preventing potential troubles at the design stage. The DFmea is the prerequisite to iSO/TS 16949 certificate.

mOBiS carried out 566 cases of required functions, 962 failure modes, 751 failure mechanisms, and 543

reflections in design in 12 categories.

• TRIZisaproblem-solving,analysisandforecastingtool.MOBISperformed10tasksandearnedanA-grade

patent and 10 B-grade patents in 2014.

Test jig manufactured using the 3-dimensional printer

Review of all products for application of global process


Suppliers’ Quality Policies

mOBiS implements diverse quality policies to support its partner companies in

strengthening their competencies.

First, the production process of core components have been standardized to ensure

competitive quality levels, while preventing losses from omissions or mix-ups on

the assembly line. Second, mOBiS and our partner companies have jointly improved

worksite processes to stabilize the quality control of mass production. Fundamental

revamps and suppliers’ autonomous quality control systems have resulted in higher

quality attainment overall. Third, we have completed a partner quality manage-

ment system (pQmS) to ensure equal quality of all parts and components. We are

also improving the analysis and search functions of pQmS. as a result, the monthly

average defects in the delivery by suppliers declined in 2014 by 80 percent from

2013, while the cS/RS 1 million indexes also improved 58 percent and 70 percent,

respectively.

Promoting Mutual Exchanges for Stronger Partnerships

mOBiS gives in-depth training on the features and functions of its parts and com-

ponents to suppliers to enhance their productivity while also sharing its defect

case studies with them to prevent quality defects. in 2014, we completed a quality

training site for 205 primary suppliers, enhancing their accessibility to all training

programs. as for the 127 primary to tertiary partners that had quality issues, we

undertook inspections on their compliance with the nine basic principles and pre-

vented any recurrences of such issues. in 2015, we plan on carrying out intensive

training with 852 selective suppliers.

We are also engaged in activities to increase exchanges with suppliers and to build

stronger partnerships. We encourage primary suppliers that have completed pre-

requisite training to give process innovation and quality training to secondary and

tertiary suppliers, while also facilitating close collaboration and execution measures

with them. in addition, we have established communication channels for synergies

between suppliers, such as subcommittee meetings and quality seminars at the

plant level.

R&D Cooperation for Suppliers’ Quality Innovation

mOBiS transfers its test/assessment techniques to suppliers and sponsors their

technological competitiveness through the joint development of original technolo-

gies and royalty-free licenses of its domestic patent rights. in 2014, we shared 127

general patented technologies and 33 utility model licenses. mOBiS also covers all

related expenses needed for filing for patents where mOBiS and its suppliers hold

joint rights and registrations and protects all patent rights. in alliance with the

Foundation of the Korea automotive parts industry (Kap), we run several training

courses to help employees of our suppliers enhance their competencies. We always

keep our doors open at our Shanghai R&D center for partner companies who have

followed us into overseas markets, supporting them with quality tests in which they

lack in-house infrastructure or techniques. in 2014, we ran a total of 22,265 tests

for our suppliers, up 20 percent from the previous year. This saved our suppliers

KRW 290 million in test expenses. This is a classic case of a win-win partnership,

as mOBiS can ensure the quality of our products while our suppliers reinvest their

saved costs in improving their competitiveness.

2014

2013

2012

22,265

18,598

15,098

unit: cases 0 5,000 10,000 20,00015,000

• TheCS1millionindexisamarketqualityindicatorthatstandsforthenumberofclaimsmadeforevery1

million vehicles in the first 90 days of ownership.

2014

2013

877

2,103

unit: cases 0 500 1,000 2,0001,500

56%

• RS1millionindexisamarketqualityindicatorthatrepresentsthenumberofclaimsmadeforevery1mil-

lion vehicles in the first 10-12 months of ownership.

1,136

3,600

0 1,000 2,000 4,0003,000

70%2014

2013

improving automotive camera wire bonding

mcneX is a camera module specialist which has recently succeeded in

significantly reducing the defect rate by improving its automotive camera

wire bonding. The main cause of the defect lied in the different thickness

between the wires of automobiles and cameras, as the gap let in moist,

which led to a failure in electronic devices. mOBiS and mcneX collabo-

rated to insert a resin-based mold between the bonding gaps to maxi-

mize the insulation. This pre-molding technique significantly enhanced

the insulation of the bondage, while improving the bend and water resis-

tance performance, cutting the defect ratio by 47 percent. Buoyed by this

quality innovation success, mcneX was able to enhance the perfection of

its technology to successfully develop an integrated camera model and

automotive wires.

Case Study: Suppliers’ Quality

Innovation

Suppliers’ CS 1 Million Index Performance Suppliers’ CS 1 million Index Performance Shanghai R&D Center Free Test Performance

approximately 95 percent of all automobile parts come from partner companies, which is why mOBiS

proactively supports innovation drives on its supply chain. as their quality constitutes our competitive

edge, we will continue to share quality policies with our suppliers through quality training and infor-

mation exchange.

SuPPLIERS’ QuALITy CONTROL

22,265 casesNo. of Shanghai R&D Center free test performance cases for suppliers

80 %The decreased ratio in monthly average defects delivered by suppliers

At a Glance automobile camera technology has continued to progress over the past few years and has now become an integral part

of safety in automobiles. committed to providing the highest quality products that are all equipped with cutting-edge

technologies and which match the longevity of the automobiles they are installed in, mcneX’s product history tracking

system and automated process effectively solve any problems that may arise after production is complete, and reflects

this in future designs to minimize the defect ratio. We also run extensive tests on electromagnetic wave and water resis-

tance performance to insulate electrical interference between electronic components in proportion to the growing use

of such components. in particular, we were able to significantly reduce our quality defect ratio thanks to a collaboration

between mcneX and mOBiS on quality innovation in 2014. as a loyal partner to mOBiS, mcneX will continue developing

a wide array of hi-tech camera module systems to become a globally competitive auto parts supplier.

Interview

Kim Jae-byung,

managing Director,

automotive Business Division of mcneX

unit: cases


1

2

3

4

The intrinsic value of a company lies in contributing to stakeholder value through

sustainable growth, while at the same time propelling innovation for a better future for

everybody. MOBIS pays attention to safety as much as to convenience and continues to make

investments in technology as it works hard to creating future-oriented green vehicles. We

strongly believe tireless R&D activities firmly support all innovation efforts. As such, MOBIS is

dedicated to its R&D efforts to bring about a better society for all.

1 electromagnetic darkroom at mabuk R&D center

2 aigbag sled Test

3 intelligent headlamp

4 Showroom of the electronic Device R&D complex at the mabuk R&D center

Strengthening our Base


R&D Vision & Mid-to Long-term Roadmap

in 2013, the mOBiS R&D center came up with a slogan, “The pride of mOBiS,” to

support the company’s vision of becoming one of the world’s top five Oem sup-

pliers. under the belief that globally competitive technologies are imperative to

attaining that goal, the center has set three key initiatives to reinforce its R&D

competencies: securing future growth engines by internalizing future core values;

establishing a global R&D infrastructure; and completing a future-oriented R&D

organization.

Global Technological Competitiveness-Building

R&D Performance

in 2014, mOBiS carried out 711 projects for 58 car models for mass production.

This was a 32 percent and 16 percent increase, respectively, from 538 projects for

50 models in 2013. When it comes to filing for intellectual property rights, we made

1,159 filings domestically and 581 filings overseas, or a total of 1,740 cases for the

year, up 20 percent from 2013.

additionally, mOBiS is spending KRW 492.7 billion in R&D investments to

strengthen its competencies. at the same time, our technological accuracy has been

constantly improving, and is firmly backed by our continual test runs on proving

grounds in Sweden, new Zealand, china, and Korea. We also have test tracks under

construction in Seosan, which are slated for completion by 2016.

R&D Expenditures

R&D Staff

2014

2013

2012

492,700

424,054

359,991

unit: KRW in millions 150,000 300,000 600,000450,000

2014

2013

2012

2,086

2,243

1,884

unit: people 0 500 1,000 2,0001,500

Future-oriented sustainability management

Internalizing future core values

internalizing core technologies

Reinforcing advanced technology R&D

Securing competitiveness in design costs

Establishing global R&D infrastructure

internalizing core technologies

Reinforcing advanced technology R&D

Securing competitiveness in design costs

Completing a future-oriented R&D organization

Training R&D experts

integrating our R&D organizational culture

enhancing our R&D work efficiency

automobiles used to simply be an innovative and fast form of transportation. Tech-

nological advancements, however, have made cars safer, more convenient and more

environmentally friendly than ever before. Behind these changes have been vigorous

efforts towards better products that all automakers have been making for the past

century. For its part, mOBiS continues to invest in human resources and infrastruc-

ture, while encouraging its employees to share the same vision and goals in devel-

oping globally competitive technologies.

RESEARCh & DEvElOPMENT

At a Glance

6 placesNo. of proving grounds at home and abroad

1,740 casesNo. of filings for intellectual property rights domestically and internationally

+32 %Growth rate of projects compared to 2013

2,086 researchersNo. of research experts (as of 2014)

major countries around the world are tightening their emissions regulations to cut down on cO2 emissions from transpor-

tation. To achieve this, vehicles have to rely on electric motors. against this backdrop, mOBiS commenced core component

operations in 2008 to produce motors, power converters, and battery packs for eco-friendly vehicles. To date, we have suc-

cessfully developed eco-friendly components for 12 different electric vehicle (ev), hybrid vehicle (hv), and fuel cell electric

vehicle (Fcev) models. Our focus has been on developing in-house green technologies with economically viable durability.

mOBiS is playing a leading role in future technology R&D activities for electric energy storage and production. We are

also laying the technological foundation to take the lead in the future automotive parts market by exploring the technolo-

gies for compact/light-weight electric motor components, higher efficiency and controllability of power converters, and

electric power technology-based applications.

Interview

Lee Hyeoun-dong,

Director,

head of eco-friendly Design Office

Laying the foundation for globally competitive technologies

• R&Dstaff includesallresearchstaff, fromjuniorresearcherstoseniorresearcherengineers(excludingre-

search support personnel). employees who work exclusively at the R&D center have counted as “researchers”

since the R&D center was reorganized in 2014.


Supporting Employee Creativity

mOBiS encourages all its employees, as well as its researchers, to get involved in

creative activities through a number of programs. employees who file for patents

are fairly treated with monetary incentives based on internal laws governing com-

pensation to employee invention. additional monetary rewards are offered when

the registered patents are used in our products or generate profits. The company

awards teams with the most outstanding performance with monetary rewards

based on an annual basis as well. We also motivate employee engagement with in-

ventions through our invention support programs. Since 2012, we have been hold-

ing a company-wide contest for ideas related to future technologies in promotion

of employee creativity. a total of 516 applications inundated the organizing office

over the past three years and 79 outstanding entries have won awards. The 2014

grand prize winner was a head tracking device for automobiles that monitors con-

ditions for safe and convenient driving. The company awarded the winner KRW 1

million and sponsored all the expenses for attending the Switzerland invention Fair.

mOBiS will continue with this awards program to motive more creative ideas and

technology development from employees in preparation for future technologies.

No. of Filings for Intellectual Property Rights in Korea and Overseas

Future Technology Contest Award Winners

Promoting Green Car Technologies

escalating concerns over global warming and energy resource depletion have

brought many countries around the world together in an effort to take more proac-

tive measures to curtail their cO2 emissions and energy consumption. The world

leader in moving to cap cO2 emissions from vehicles is the eu, which is lowering

its requirements to 93 g/km by 2020. The world’s two largest automotive markets,

china and the u.S., are also adjusting their limits to 110 g/km and 113 g/km,

respectively. The Korean government has now set its target at 97 g/km. Stricter

Internalizing Green Component Technology Competencies

regulations are calling for changes in the auto industry, and complete carmakers

are opting to change in one or both of two ways: one is to raise their fuel economy

by enhancing the efficiency of internal combustion engines; the other is to increase

the use of telematics technologies with their vehicles. in response, mOBiS is de-

veloping electric motor systems for higher efficiency in its internal-combustion

engines, while replacing its conventional products with electronic components.

R&D on Key Components for Green Vehicles

mOBiS mobilizes all its R&D resources and production/quality control capabili-

ties to supply core components of green vehicles for hyundai and Kia motors. By

reinforcing our design competencies and standardizing our process, we have been

developing original technologies.

With plug-in hybrid electric vehicles (phev) currently under development, transmis-

sion mounted electric devices (TmeD) that kick in to electric mode on flywheel

mounted electric devices (FmeD), as well as other products tailored to the needs

of different classes of automobiles, are moving ahead smoothly in the production

stage. We are also channeling our resources into developing components for fuel cell

electric vehicles (Fcev), including all-wheel drive types for all class of vehicles and

electric motor products for in-wheel systems. mOBiS will continue to standardize and

universalize diverse eco-friendly electronic components and prepare for mass produc-

tion of mixed car models to take the lead in the future Oem suppliers market.

Motors and Starting Generators electric motors empower cars through an en-

gine, transforming kinetic energy into electric energy at the time of deceleration to

enhance energy efficiency. mOBiS supplies 38 kW-class electric motors and 8 kW-

class starting generators for hybrid vehicles and 80 kW-class permanent magnet

motors for subcompact electric vehicles (ev), as well as 100 kW-class induction

motors for fuel cell electric vehicles.

Battery Systems Battery systems consist of battery packs that supply high-volt-

age electric energy to the vehicle, while the battery controller protects and controls

the battery pack and battery. This makes battery packs a core part with a significant

Ensuring mass production of heatproof/heat-protective automobile parts

power conversion

Battery packs

High Efficiency

Economical Prices

Compact·Lightweight

2014

2013

2012

1,740

1,446

1,471

unit: cases 0 500 1,000 1,500

581

340

246

1,159

1,106

1,225

Korea Overseas

Proving Grounds

arjeplog (Sweden, 1,652,892 m2)

Wanaka (new Zealand, 99,173 m2)

heilongjiang province (china, 2,975,206 m2)

KaTRi (Korea Transportation Safety authority, Korea, 2,148,760 m2)

KaTech (Korea automotive Technology institute, 46,280 m2)

Seosan (Korea, slated for completion in 2016)

Major Test Criteria

· advanced new technologies including meB/cBS/mDpS/epB/ driver assistance systems (DaS)

· credibility assessments and winter sign-offs for client companies

· Benchmarking new technologies and products

· evaluation of meB/SpaS/braking/steering component performance

· advanced new technologies including meB/cBS/mDpS/epB/DaS changing the logic to improve driving and braking functions

· Benchmarking new technologies and products

· assessment of braking functionality and credibility of meB on special roads

· Driving school to foster specialized test drivers

· equipped with 14 types of road conditions, including high-speed running and future car driving test roads

· Testing the running stability of braking/steering equipment and DaS

Proving Grounds in Korea and Abroad

Overseas R&D Centers

Frankfurt (Germany)

core technology R&D specialized to

european conditions: DAS/braking/design

Hyderabad (India)

Supporting SW architectural

development and SW design robustness

Detroit (uSA)

core technology R&D specialized to

american conditions:

green vehicles/IT/autonomous driving

Shanghai/Beijing/Tianjin (China)

Developing products optimal to

local conditions at low costs

motors Fuel cells

2012

2013

2014

Prizes

Grand prize

Gold prize

Gold prize

Grand prize

Entries

Speaker recognition smart key

headrest-embedded independent directivity speaker system

utilizing the electronic parking brake (epB) system for cooperative regenerative braking and energy recovery

head tracking device for automobiles

Test driving at the winter test tracks in heilongjiang

• Therewasnograndprizewinnerin2015.

extreme climates and the resultant natural disasters have sent alarm bells ringing around the world.

Belatedly aware of the need for vigilance to the environment and society’s sustainability, the global

community is scrambling to prepare and heighten relevant regulations. mOBiS, for its part, is mobiliz-

ing its R&D resources to develop eco-friendly components and parts for high energy efficiency, light-

weight and compact automobiles.

GREEN TECHNOLOGIES

260,911 vehiclesTotal number of vehicles to which MOBIS supplied eco-friendly components since 2010

1,311,520 partsTotal number of eco-friendly components MOBIS supplied from 2009 to 2014

At a Glance

Internalizing core design technologies based on a comprehensive technology R&D roadmap

HRD, Technology Standardization, Technology R&D Master Plan


influence on the mileage and fuel economy of vehicles. mOBiS has successfully

localized this technology, improving its price competitiveness in the process. Today,

the company taps into diverse high technologies to lighten the weight of battery

packs and applies a universal design to dispersed battery control systems. addi-

tionally, our battery indicating algorithm’s accuracy has been improved, enhancing

energy use efficiency.

Battery Chargers Battery chargers use supply voltage (ac 110/220v) to charge

high-voltage batteries installed in evs and phevs. mOBiS succeeded in the mass

production of compact-sized, lightweight battery chargers with higher efficiency by

enhancing the productivity of electronic semiconductors and downsizing/modular-

izing the electronic components.

EPCu/HPCu (Electric/Hybrid Power Control units) hpcus consist of an in-

verter that controls the torque and speed of electric motors and a converter that

empowers the electronics systems of a vehicle with 14 volt electricity. mOBiS sup-

plies passenger hybrid electric vehicles (hev) with inverters for electric motors/

starting generators as well as integrated 1.8 kW-class convertor modules. We also

provide low-speed, high-torque motor inverters and 100 kW-class motor inverters

that are uniquely featured in commercial hevs and Fcevs. in 2014, our integrated

package designing enhanced the power density of mOBiS products, while the

newly integrated design of the control board of inverters, lDcs (low-voltage Dc-Dc

converters), and hcus (hydraulic control units) were made smaller for the Soul ev

and lF Sonata hev.

Hydrogen Supply Devices hydrogen supply devices provide hydrogen, the

fuel source of Fcevs, and control the output of the fuel cell stacks by adjusting the

hydrogen flow rate. it applies a technology that reuses the unreacted hydrogen in the

fuel cell stacks, thereby raising the hydrogen consumption rate. mOBiS has now suc-

cessfully developed 110 kW-class hydrogen supplier devices that realize high power

density with a modularized design, while enhancing the efficiency of the fuel cell

system through integrated control of the hydrogen supply. By applying a hydrogen

recirculation compressor, it achieved a 95 percent hydrogen consumption rate.

Development of Intelligent Safety Parts

automobiles that allowed for fast and convenient mobility over the past century

are now faced with rising calls for greater safety mechanisms. mobile safety guide-

lines have also evolved from passive safety, which used to focus on the ex post

facto, to active restraint functions that prevent accidents. consequently, advanced

automobile markets in north america and europe have made intelligent safety sys-

tems a legal requirement with restricted safety regulations.

committed to realizing safer cars, mOBiS analyzes different cases of accidents to

develop new technologies for effectively averting risks and for minimizing dam-

ages in the event of an emergency. The driver/park assistance functions and airbag

control system are now directly connected to road safety and therefore even tiny

errors have been eliminated. mOBiS has obtained the iSO 26262 functional safety

certifications for these products, which only served to further their international

credibility.

Intelligent Technology R&D Infrastructure

intelligent technology is gradually expanding its scope into automobiles. in fact,

the euro ncap, which provides an independent assessment of the safety level of

the most popular cars sold in europe, is applying stricter protocols on active safety

control technologies and the u.S. national highway Traffic Safety administration

(nhTSa) is also phasing in active safety system evaluation criteria in the immediate

future. in preemptive response to these market changes, mOBiS has been involved

in preliminary studies for active safety control systems. We are also concurrently

preparing quality control systems for mass production, with the related organiza-

tion already established within mOBiS. as soon as the preliminary Study Team gen-

erates tangible results in its R&D activities, the mass production Design Team will

swiftly coordinate mass production.

Intelligent Safety Technologies

• LKAS:LaneKeepingAssistanceSystem

• BSD:BlindSpotDetection

• SCC:SmartCruiseControl

• HDA:HighwayDrivingAssist

• ADB:AdaptiveDrivingBeam

• ACU:AirbagControlUnit

• ASB:ActiveSeatBelt

• AEB:AutonomousEmergencyBraking

• SPAS:SmartParkingAssistSystem

Supporting drivers with driving,

breaking and steering to reduce driver

fatigue and prevent accidents

In anticipation of a possible crash,

airbags and adjustable safety belts

minimize any potential damage

As a precaution in dangerous

situations, emergency braking prevents

collisions or at least minimizes any

possible damage

Assisting drivers in parking their

vehicle by steering the vehicle into a

parking space with little input from

the user

lKaS/BSD/

Scc/hDa/aDB

acu/aSB

aeB

SpaS

Active Safety Functions

Minimizing Accident Damages

Collision Avoidance & Mitigation

Intelligent Parking Assist

System

Green Vehicles using MOBIS Technologies

hyundai Motors

Kia Motors

2009

2010

2011

2012

2013

2014

2015

Elantra Forte

Sonata K5 Ray

BlueOn

Azera K7 Tucson

Ultra-low floor CNG buses

lF Sonata Soul

Sonata PhEv new K5 Sonata (for the Chinese market)

eco-friendly exclusive models

hybrid electric Fuel cell

• Fuelcellstackinduceschemistrybetweenhydrogenandoxygentogenerateelectricity.

9.8 timesDAS components supply growth rate compared to the number of supplied vehicles in 2013

6.6 timesDAS components supply growth rate compared to applied components in 2013

At a Glanceevery year an average of 50 million people die or are injured from traffic accidents around the world.

Traffic accidents are predicted to climb up to the fifth major cause of death by 2030. Domestically,

approximately 200,000 traffic accidents occur every year, with a death toll 1.7 times higher than the

OecD average. mOBiS is converging iT and electric/electronic technologies to realize intelligent func-

tions of detecting and averting dangerous risks with automobiles. Based on an extensive analysis of

the different types of traffic accidents that commonly take place, we are working on advanced tech-

nologies for greater safety on all roads.

INTELLIGENT COMPONENT TECHNOLOGIES

38 mOBiS SuSTainaBiliTy RepORT 2015

Commercialization in 2014, mOBiS successfully commercialized its smart cruise

control (Scc) system. applied to sedans, the system facilitates an active safety control

system. Furthermore, our mass production plans for our original technologies with

lKaS, SpaS, and aeB in 2015 have brought us to the completion stage of perfect-

ing an autonomous self-driving system. as part of our continued preliminary study

of new technologies, we focused on integrating different sensors and harnessing iT

information synergy effects in 2014. as a result, we successfully integrated the SpaS’

ultrasonic sensor and avm* camera sensor to develop a technology that can detect

open parking areas. moreover, we are currently developing a remote parking system

that relies on mobile devices.

The Future Direction of Intelligent Technology R&D

at mOBiS, our driver assistance system (DaS) is in mass production in two forms.

One is a car forward/backward controlling of acceleration and deceleration, such as

Scc and aeB, and the other is a sideway controlling of steering, such as lKaS and

SpaS. The integrated control of both directions will enable an autonomous self-driv-

ing system in only a matter of years, bringing us one step closer to fully unmanned

autonomous driving technology. The world’s leading iT companies and carmakers

are also continuing R&D investments to commercialize unmanned autonomous

self-driving technology. in preparation of the fast advent of intelligent driving (driver

assist and self-driving), mOBiS is vigorously internalizing the necessary technolo-

gies for control logs and continuing with its technology R&D for commercial sup-

port systems.

AEB (Autonomous Emergency Braking)

camera sensors

control units

Braking system

Radar sensors

cluster

automotive lighting

R&D for Autonomous Emergency Braking

in preparation for the up-and-coming realization of DaS technology, mOBiS has de-

veloped an aeB system to realize intelligent driving technology. The aeB utilizes mul-

tiple sensors for front-view monitoring and automatically applies emergency braking

when the system detects an imminent collision. as of 2014, the european ncap

obliged aeB systems on all cars sold in european countries, and a pedestrian aeB law

is also slated for 2016. in January 2015, the u.S. nhTSa also decided to include the

aeB in its new car model assessment program, while Korea’s Transportation Safety

authority is adding the aeB to its car safety test criteria starting in 2016. in response,

mOBiS plans on using an aeB system that can recognize both vehicles and pedestri-

ans on its new models starting in 2015, and will apply it to all models by 2016.

DAS Image Sensors Integrated to the ECu

The growing demand for higher road safety and stricter regulations is fuelling rapid

growth in the automobile camera sensor market. image sensor technology also

plays a pivotal role in safety and convenience systems for automobiles. at the end

of 2013, mOBiS completed the technological development of an integrated image-

sensing front-view camera that uses one million-pixel image sensors for car lanes,

lamps and vehicles. The lKaS and forward collision warning (FcW) system, as well

as the lane departure warning system (lDWS) and high beam assist (hBa) system,

are fully integrated into one engine control unit (ecu), allowing for multiple func-

tions as well as the addition/deletion/modification of functions as needed.

also under development are functions such as protecting pedestrians and reading

road signs as options for new car models. additionally, our new design technology

for a compact-sized camera model is highly expected to improve vision and design

benefits. another new technology in development is a stereo camera.

39cORpORaTe achievemenTS

• AVM:aroundviewmonitoring

Forward warning

collision warning

emergency braking

0 3

C o r p o r a t e A c h i e v e m e n t s


40 management performance

44 Win-win partnerships

48 customer Relations management

52 Social contribution

58 employees

64 environmental management

mOBiS takes into account the sustainability of its entire value chain and willingly shares its performance

results with all its stakeholders. We also open all our management information to stakeholders and

invite their opinions to be reflected in our future business plans. This is our way of helping shape a better

tomorrow for everybody.

40 41cORpORaTe achievemenTSmOBiS SuSTainaBiliTy RepORT 201540 mOBiS SuSTainaBiliTy RepORT 2015

Economic Value Creation & Distribution

Businesses thrive on the contribution and cooperation of all its stakeholders. as a result, they owe a good portion of the economic value

they generate to their stakeholders. This is why mOBiS strives to ensure the fair distribution of the value it generates every year. Thus, inves-

tors should earn healthy profits; employees should be able to care for their families with complete job security; local communities should

benefit from various social outreach programs and SOc investments; and government corporate taxes should be used for public welfare. in

2014, mOBiS generated a total of KRW 37,250 billion in sales and other economic value, and distributed much of this to its stakeholders

through a variety of different ways.

Creation and Distribution of Economic Value

Management performance

1 Taxation (corporate taxes, value added taxes)

mOBiS honors all its obligations by paying all dues and taxes and actively

participating in governmental policy drafting.

2 Wages and fringe benefits

mOBiS offers generous wages and fringe benefits to enhance employee

engagement and satisfaction.

3 Purchase expenses and subcontracts

mOBiS purchases goods and services at fair value from suppliers and

maintains mutually beneficial partnerships.

local communities 4

KRw 16,011 million

Retained earnings 5

KRw 3,392,512 million

creditors 6

KRw 32,914 million

Government 1


employees 2


Suppliers 3


4 Social contribution expenditures

mOBiS contributes to the sustainable development and stability of local

communities through donations, volunteer work, and SOc investments

5 Net profit

net profit from manufacturing operations declined 0.1 percent from the

previous year to KRW 3,392.5 billion in 2014. mOBiS paid KRW 286.6 billion

to investors in dividends.

6Interest expenses

interest expenses declined from the previous year, as some of our operations

completed repayment of their borrowings.

KRW 36.2 trillion2014 Sales

2014

PROGRESS IN 2014

2014 Achievements

Sales: KRW 36,184,974 million (5.5 percent year-on-year growth)

Operating profit: KRW 3,070,594 million (5.0 percent year-on-year growth)

Global OEM Suppliers Rank: 6th place (as announced by Automotive News)

Exporting Achievement: Recipient of the uSD 10 billion Export Tower Award

2015+

FORECAST AND OBJECTIVES

Established an infrastructure for supplying components for the production of

8.2 million complete cars

expansion of production bases

Completed a global maintenance system network

establishment and operation of related organizations and standardization of the

maintenance process

Strengthening global operations to secure growth drivers

Reinforcing strategic customer relationship management and product competitiveness

Domestic and global modules and

core parts manufacturing bases

27 bases

Economic value generated

by MOBIS in 2014

KRW 37.25 trillion

2014 year-on-year

sales growth rate

+5.8 %

painting line at the alabama plantRecipient of the uSD 10 Billion export Tower award

Economic Value Created

KRW 37,250.2 billion:KRW 36,185 billion in sales and

KRW 1,065.2 billion in other means

• Othervaluereferstootherprofitsafterdeductingotherexpensesanddepreciation.MoredetailsofMOBIS’s2014businessresultsandyearlytrendsareavailableonpage71.

42 43cORpORaTe achievemenTSmOBiS SuSTainaBiliTy RepORT 2015

2014 Business Results and 2015 Outlook

in 2014, mOBiS posted KRW 36.2 trillion in sales and KRW 3 trillion in operating profit, up 5.8 percent and 5.0 percent from 2013, re-

spectively, through prudent responses to changes in the domestic and overseas business environment. Sales by sector rose, too. module/

component manufacturing expanded 6.4 percent and generated KRW 28.9 trillion in proportion to the increased sales of new models

and high-class Suvs in china and europe, as well as increased output at our global plants. aftermarket Service parts sales also edged up

by 0.7 percent over 2013 to reach KRW 6.3 trillion on the back of robust overseas sales and the increased sale of complete cars by our

client companies.

Going forward, we will strategically integrate operational platforms, standardize our modules and components, and keenly reflect trends

in the auto parts industry in our strategies, while pursuing strategic alliances in pursuit of economies of scale and sustainable growth.

Expanding Our Production Bases

By drawing on our experienced manufacturing competencies and supply systems, mOBiS runs a total of 27 module/core parts manu-

facturing bases at home and abroad to ensure the stable supply of products to our client companies. Our primary goal is the seamless

support of all production goals to our major clients, namely hyundai and Kia motors. To that effect, all our plants strive to enhance

product competitiveness, while establishing global process standards in effective response to the globalization of our production lines.

This allows us not only to realize the highest quality products in reflection of customer demand, but also to optimize our operations to

the different conditions of our international subsidiaries.

in 2014, our module plant #3 in Beijing expanded its capacity to supply components for 150,000 vehicles. at the same time, it estab-

lished production lines for core components in order to meet the growing local demand for green vehicles. in india, our subsidiary there

commenced production of airbags and audio systems, thereby supporting mOBiS to raise its market share in the local market, a highly

competitive market in the global auto industry. another important mission is to supply components for iBs, a localized model of the

hyundai motor company that is enjoying exploding sales growth.

Global Expansion for Future Growth Engines

it is safe to say that our future growth depends on firm partnerships with diverse client companies. Therefore, mOBiS has differentiated

its strategies to specific local needs to reinforce its competitiveness with a wide array of clients. While localizing our technical and price

competitiveness with customized design strategies, we also rely on a diagnosis/innovation program to maintain sustainable relation-

ships with client companies. as a result, we landed orders worth uSD 537 million from our global clients in 2014. We also developed

our own mSiS (mOBiS Sales information System) to manage our project history and customer information that same year. in addition,

we hold regular technical exhibition and exchange sessions with clients to help them better understand our technologies and product

competitiveness. Today, our prominent global client base includes chrysler, Gm, BmW, Daimler, volkswagen, mitsubishi, and Subaru.

Major Products Supplied to Global Clients

Sales

Operating Profit

Net Profit

Major Facility Investments

Sales by Business Sector

Global Manufacturing Bases (number of bases)

Other Oes3.7%

modules 59.3%

core components37.0%

North America

chRySleR: head/rear lamps, integrated center stacks

(ICS), lCD modules

Gm: drums in hat (DIh) parking brake systems,

automatic occupant sensors (AOS), ICS

Europe

vOlKSWaGen: high mounted stop lamps (hMSl)

BmW: rear combination lamps

DaimleR: audio systems, intelligent battery sensors (IBS)

Korea

Gm KORea: ICS

SSanGyOnG: audio-visual navigation

(AvN) systems, head/rear/fog lamps

China

ShanGhai Gm: DIh parking brake

systems, ICS

Japan

miTSuBiShi: head lamps

SuBaRu: rear/fog lamps

40,000

30,000

20,000

10,000

0

unit: KRW in billions

2012 2013 2014

30,78934,199

36,185

+5.8%

4,000

3,000

2,000

1,000

0


2012 2013 2014

2,906 2,9243,071

+5.0%

800

600

400

200

0


Domestic subsidiarie

Overseas subsidiaries

793

338

4,000

3,000

2,000

1,000

0


2012 2013 2014

3,5423,396 3,393

-0.1%

KRW 3.1 trillion2014 Operating profit

27 basesDomestic and global module and core part manufacturing bases

auto Financing2.9%

module & component manufacturing

79.8%

parts Sales17.3%

• FiguresonlyincludefacilityinvestmentsandexcludeR&Dinvestments.


Supplier Relationship Management Policies

mOBiS refined its win-win partnership strategies into enhancing suppliers’ competitiveness and expanding practical win-win partner-

ships to offer practical support to all of our partner companies. For instance, we carry out biannual in-house evaluations on suppliers’

product quality control, environmental management system certifications (iSO 14001), human rights practices, safety control at work-

sites, business ethics, and mutual growth initiatives between primary and secondary/tertiary suppliers. Based on the evaluation results,

we support them in addressing the issues which need to be addressed or other shortcomings. additionally, we offer special benefits to

primary suppliers who support their secondary/tertiary suppliers in a bid to strengthen their partnerships and competitiveness. Behind

all these efforts is our firm belief that the product and technical quality of our suppliers ultimately strengthen our competitiveness.

Over the years, mOBiS has gradually raised its percentage of cash payments, while also expanding its training and technical/quality

guidance in alliance with the Korea automotive parts industry (Kap). in addition, we are increasing the available funds for financial aid

and technical/quality control consulting to benefit secondary suppliers.

Supplier Support Directions & Action Plans

Fair Transaction Agreements and Mutual Growth Programs

mOBiS has signed countless agreements with its partner companies for fair transactions and mutual growth. To carry out this commit-

ment, we have four guidelines in place: transparent contracting practices, supplier registration, an internal review committee, and docu-

mentation-based operations. The number of signatories to these agreements has expanded over the years so that in 2014 we achieved

our sixth round of agreements with 443 suppliers for transactions worth KRW 5.4 trillion.

as part of our commitment towards mutual growth alongside our suppliers, we have integrated separate division-level initiatives into

a companywide shared campaign called Seven Beautiful pledges, allowing mOBiS a more systematic approach to its mutual growth

initiatives. in 2010, this program expanded the coverage of beneficiaries to include the entire supply chain under more refined action

plans.


Win-Win partnerships

KRW 5.5 trillionSize of transactions under all

2014 fair transaction agreements

2014

PROGRESS IN 2014

Supporting suppliers’ competency-building efforts

We offer practical support measures to suppliers in the development of their competitiveness

under detailed strategies for mutual growth, such as “strengthening suppliers’ competitiveness”

and “increasing practical win-win partnerships.”

Increasing the number of fair transaction agreements

in 2014, we entered into our sixth round of agreements with 443 suppliers for transactions

worth KRW 5.4 trillion.

Fair Trade Compliance Program

We internalized fair trade compliance awareness through regular checks and a number of

training sessions.

2015+


Intensive management of secondary/tertiary suppliers to help them enhance quality

control competencies

Expanding financial aid to secondary suppliers

Bolstering partnerships with suppliers through a transparent umbrella project

Supplying Smes with 20,000 transparent umbrellas

No. of primary suppliers

as of 2014

869 companies

Loan program exclusively for

MOBIS suppliers

KRW 126.5 billion

MOBIS’s grade in the

CP practice evaluation

A level

Rewarding suppliers who have outstanding performance results with seasonal fruitsmanagement by walk around at suppliers’ worksites

Maximizing mutual growth

increasing practical win-win partnerships

Reinforcing suppliers’ competencies

Reinforcing suppliers’

competitiveness

promoting win-win

partnership programs

increasing R&D support

expanding business

consulting to suppliers

expanding supplier training/

seminars

Fair opportunities for bidding

competitions


Financial Aid to Suppliers

mOBiS contributed KRW 96.5 billion in funds exclusively for the financial stability of its primary suppliers, offering payment guarantees

for underbanked suppliers to receive low-interest loans. as of 2014, 42 suppliers received a total of KRW 56.8 billion in loans under the

program. additionally, we plan on introducing a KRW 30 billion program exclusively for secondary suppliers.

in a bid to help its suppliers with liquidity problems, mOBiS pays all its bills in cash, with the scope of beneficiaries expanded to include

larger-sized Smes with sales of KRW 200 billion as of September 2014. We also advise our suppliers to make cash settlements among

fellow suppliers to promote this practice throughout our entire supply chain.

in consideration of the impact that volatile commodity prices have on our suppliers, we sit down with them to adjust supply prices

whenever there is a more than five percent change in prices. in 2014, we raised the prices of our supplies worth KRW 59.3 billion. Fur-

thermore, all changes to supply prices are transparently disclosed to every supplier on a separate portal site, which serves as the under-

lying data for fair transactions.

Win-Win Program within Our Sales Networks

The mOBiS automotive parts sales network consists of agencies and dealers, and is another critical factor to our competitiveness, mak-

ing it a major part of our supply chain. We support their competency-building with varied training programs as well as other practical

programs to assist with their business activities. For instance, we dispatch our business consultants to agencies where our representa-

tives can help with business restructuring. additionally, our Best practice awards motivates higher performance results at these same

agencies. We share the burden of product defects that occur in the process of warehousing or transporting parts and components. at

the same time, we support their inventory cost-saving measures and distribution control enhancement. This, in turn, adds to our com-

petitive edge.

Compliance Program

mOBiS adopted a compliance program (cp) as part of its bylaws for legal compliance in December 2002, and has been promoting

voluntary compliance within its organization since then. every year, the company’s ceO reiterates his commitment to compliance prac-

tices, with the compliance officer serving as the chief facilitator of this commitment by overseeing company-wide cp operations, such

as general compliance activities and the prevention of violations. appointed by the BOD, the compliance officer is entrusted by the ceO

with the authority and obligation to smoothly run all independent cp operations. established to support the compliance officer, the cp

Bureau takes charge of practical cp operations throughout the company. also under the control of the compliance officer is the legal af-

fairs team, which contributes its legal expertise on a regular basis.

CP Council

Self-checks on Compliance Practices

mOBiS has a compliance practice self-checking framework in place to ensure that day-to-day job fulfillments are free of any legal viola-

tion risks. all employees can consult the cp website and legal affairs website regarding any cp issues arising in the due course of their

daily duty fulfillment. in particular, the cp website provides a compliance self-check list for employees to review any risk of legal viola-

tions. if and when they find a risk(s), or are not sure about the compliance issue itself, employees are advised to receive a preliminary

review by the legal affairs Team in order to prevent any legal risks.

The cp Bureau evaluates the risk exposure of legal violations by each business division to identify key risk factors, for which it runs

regular monitoring as part of company-wide prevention activities. in the event of any changes to government policies or amendments

to relevant regulations, we take separate measures to steer clear of potential risk factors.

Compliance Program Training

mOBiS offers regular cp training to raise employee awareness of the cp, with training performance results reported to the BOD biannu-

ally. Staff members at divisions most vulnerable to fair transaction issues, such as the parts Sales Division and procurement Division, are

obliged to attend offline cp training courses every year, while cp employees are kept abreast of trends with related policies and regula-

tions through external specialized training courses. Furthermore, the new employee orientation program includes information on the

basics of the cp to help them quickly adapt to it.

2014 CP Training Performance Results

Staff at the most vulnerable departments (persons)

485

CP staff (persons)

24

Executives (persons)

6

New employees (persons)

368

Training hours

1,366

Fair transaction agreements and mutual growth programs

Subcontracting agreements between primary and secondary suppliers

Training program support Training programs

no. of trainees

unit

no. of companies/KRW billion

no. of companies

no. of companies

persons

2012

559/3,079

202

901

1,924

2013

555/5,143

403

1,710

2,251

2014

443/5,449

412

1,648

2,265

KRW 126.5 billionSize of supplier loan program

1,366 hoursCP training hours in 2014

Seven Beautiful Pledges Performance Results

Supplier Communication Programs Performance of Financial Aid & Loans for Suppliers

cp Bureau (Business

cooperation Team)

advisors (legal affairs Team)

BOD CEO compliance Officer

Regular general meetings of suppliers

Executive meetings of the Win-Win Partnership Council

Seminars for CEOs of primary suppliers

Seminars for CEOs of secondary suppliers

Meetings with major suppliers

Fruit basket rewards to suppliers with outstanding performance results

Seminars for suppliers to our local subsidiaries in India and China

H-Festival

No. of sessions (yearly)

1

2

3

2

1

1

1

1

unit: sessionsunit: KRW in billion, no. of companies

2012 2013 2014

3542 42

Funds Supplier loans

no. of beneficiaries

37.4

76.0

49.8

89.2

56.8

96.5

• Thenumberofbeneficiariesreferstoprimarysuppliersthatbenefitedfromtheprogram.


Aftermarket Service Parts Supply & CS

Businesses in the automobile industry are obliged to timely supply end-users with aftermarket service (aS) parts for vehicles sold by

carmaker clients. under the relevant Korean laws governing the industry, all aS parts are required to be available on the market for at

least eight years after a vehicle model has been phased out. in compliance with this, mOBiS supplies aS parts to hyundai and Kia mo-

tors vehicles both in the domestic and overseas markets by drawing on its vast distribution network after rigorous tests and quality as-

surance programs are carried out to ensure the optimal functionality of various vehicle models until the end of each model’s lifecycle.

as of 2014, approximately 53 million hyundai and Kia vehicles were on roads around the world, with mOBiS supplying 2.14 million aS

parts for 202 different models. although customer demand for aS parts is always unpredictable, it is characteristically immediate, mak-

ing efficient logistics operations critical to their timely supply. as a result, mOBiS has optimized its logistics operations with a standard-

ized system which uses an intelligent warehousing system to allow for real-time monitoring of all procedures, from storage to shipment

of aS parts, and which completely depends on an efficient barcode system.

Automotive Parts Sales Network in Korea and Overseas

Customer Satisfaction System

mOBiS operates its own customer service center, where the voice of the customer (vOc) is promptly addressed in connection with our

SmaRT (Smart mOBiS agent for Reaching Global Top 10) system. any request for aS parts is forwarded to the nearest logistics network

base so that the item in demand can be delivered within two days. We also conduct annual surveys on our retail and wholesale custom-

ers to understand our customer satisfaction level better, and reflect these results in enhancing our overall customer service experience.

in 2014, a total of 2,875 customers provided answers to our survey. We also gave specialized training to all our cS staff at customer

contact points. That same year, 2,657 employees received a total of 13,890 hours of cS related training.


Customerrelations Management

Aftermarket Service Parts Supply Performance

• The“Branchesandoffices”figureincludesoverseaspartssalesbusinesscentersand

logistics centers.

Korea

Overseas

parts sales centers

logistics centers

Service parts sales teams

agencies

automotive parts subsidiaries

Branches and offices

agencies

Dealers

23

4

43

1,976

13

54

477

11,262

202 car modelsNo. of car models for which MOBIS supplied its aftermarket service parts in 2014

unit: centers

2012 2013 2014

185

1,923,926

194

2,007,661

202

2,143,378

Carmodels Items

2014

PROGRESS IN 2014

Product development for increased customer safety

Development of intelligent headlamps and huD systems

Reinforced design and manufacturing competitiveness through standardization and

universalization of components

Enhanced fuel economy through lightweighting

2015+


Optimal supply of products through enhanced design and manufacturing competitiveness

Reinforcing competitiveness through product life-cycle system innovation and

standardization/universalization

Product R&D for enhanced customer safety and convenience

Developing safe and convenient products by converging iT and electric/electronic technologies

with the aim of realizing fully unmanned and autonomous self-driving

Establishing a customer value service framework

engaging in market-oriented sales strategies and establishing a service process for higher

customer satisfaction

No. of employees who participated in

CS training in 2014

2,657 persons

No. of aftermarket service part items

supplied for repair of 202 car models in 2014

2.14 million

Percentage of improved component

design specifications compared to 2013

25 %

inside india’s chennai component centerasan logistics center


Product R&D for Enhanced Customer Safety & Convenience

Today, the auto industry is going through a paradigm change in mobility that goes well beyond transportation and into more of a safe,

convenient lifestyle space. car-infotainment and driver assist systems (DaS) have largely made this possible. Thus, mOBiS is channeling

many of its R&D resources into developing these products to increase customer satisfaction.

Evolving Headlamp Technology headlamp technology is constantly evolving. a case in point is the adaptive driving beam (aDB),

which enables the driver to see the road ahead in the evening at nearly the same level as if using high beam lights, yet without the

accompanying glare. Following its successful development of its smart-light headlamp, mOBiS has strengthened its lamp technol-

ogy with the recent development of an advanced matrix headlamp technology. The matrix headlamp effectively addresses the glare

issue without compromising brightness by employing a number of individually controllable light-emitting diodes (leD) that are all

arranged in a matrix.

also under development at mOBiS is the technology needed for high-resolution intelligent headlights, which will effectively resolve

the discontinuity between turning lights on and off through a highly refined and controllable electronic shield. This will result in an

accurate dispersion of light on a broader range. in short, mOBiS is developing lamp technologies to achieve the highest customer

safety and convenience.

HuD (Head up Display) according to 2013 traffic accident statistics from around the world, human error, such as inattentiveness,

driver negligence or other unsafe driving practices, account for 72 percent of the critical cause related to lethal accidents. With a grow-

ing mobile population that uses personal iT devices like smartphones, navigation devices and DmBs, there has been a corresponding

rise in inattentive driving, resulting in a greater number of traffic accidents. in a bid to prevent accidents that stem from inattentiveness,

but which also allows for increased driver convenience, mOBiS is now actively involved in R&D for heads-up display (huD) technology.

This technology is a transparent display that presents data without requiring users to look away from their usual viewpoints, providing

such information as speed, lane departure, and navigation in a virtual image within a two-meter distance. Our goal is to match the vir-

tual image to the actual roads ahead by applying an augmented reality technology, with the aim of completing this R&D by 2015.

Optimizing Our Products

under the belief that customer demand constitutes the standard for our quality control, mOBiS practices customer-oriented manage-

ment throughout its value chain, from planning and design to manufacturing and warranty service. We are ceaselessly working towards

higher manufacturing competencies in support of our client companies’ complete car sales, while deftly aligning our products to cus-

tomer needs.

Standardizing and universalizing Design and Manufacturing Processes To encourage creative ideas and discuss standardizing

and universalizing hardware and electronic components, mOBiS hosts regular universalization exhibitions for its client and partner com-

panies. in 2014, an across-the-board initiative involving procurement, manufacturing and design aspects of the company was carried

out to standardize and universalize related processes. as a result, the procurement sector benefited from reduced material expenses,

while the design sector benefited from shorter waits with designs. in addition, technology could be shared more easily between differ-

ent models under development, and the manufacturing sector saved on facility investments and enhanced productivity through a more

standardized process. Quality control also benefited from the initiative, as proven components in performance and quality were able to

be reused, which only heightened the ultimate quality level.

additionally, the company standardized and universalized its hardware, chassis, design and electronic components, streamlining the

specifications of all core components. as with multipurpose products, we successfully reduced the number of models while enhancing

the user interface experience. consequently, the number of components subject to universalization declined 25 percent, from 4,812 in

2013 to 3,618 in 2014.

Progress on Component universalization

Lightweight Components for Better Fuel Economy By reducing the weight of its components to increase the fuel economy of the

complete cars it is associated with, mOBiS has helped in contributing to client competitiveness.

mOBiS takes a strategic approach to lighten its components by module type. While using composite materials for front bumper beams,

we also developed a structure that can supplement the robustness of the part, which decreased the number of components used and

reduced their weight. The weight of the driver’s seat module was also lightened in accordance with the different functions of the com-

ponents. at the same time, we replaced steel suspension components with aluminum materials, reducing the overall weight by 30 per-

cent. mOBiS will continue its design innovation measures to cut down on the number of components under a roadmap calling for the

implementation of plastics in all components by 2020. This will enhance both fuel efficiency and optimize product development process.

Progress on Component Weight Reduction

Product

Bumpers

Driver’s seat modules

Suspension

Comparative Lightness from 2013

12%

20%

30%

Front bumper beam

ip cores

control arms, knuckles, and carriers

materials changed and injector structure improved

using ultra-strength materials

Replaced steel with aluminum materials

Hardware

Chassis/Design components

Electronic components

total

2013

460

423

3,929

4,812

2014

272

350

2,996

3,618

Improvement Rate

25%

unit: units

25 %Improved rate of component design specifications through standardization and universalization (compared to 2013)

30 %Reduced weight by applying aluminum to suspension materials

HuD (Head up Display)

• Basedondesignspecifications


Social Contribution

CSR Strategies & Signature Programs

mOBiS lends its business acumen to supporting the underprivileged, while also developing mutually beneficial social outreach pro-

grams. in this context, we developed the four mOve campaigns in line with our business philosophy and cSR principles. Since the

launch of its signature Transparent umbrella program back in 2010, mOBiS has initiated other mobility campaigns for disabled children,

completing the last of the four mOve campaigns in 2014.

CSR Strategies

20,000

15,000

10,000

5,000

0

unit: KRW in millions

2012 2013 2014

13,263

18,153

15,124

2014 Social Contribution Expenses (non-consolidated) Social Contribution Expenses by year (non-consolidated)

KRW 15.1 billionAmount spent on domestic CSR activities in 2014

2014

PROGRESS IN 2014

SAFE MOVE - Transparent umbrella Campaign for Children’s Safety on the Roads

100,000 transparent umbrellas distributed to students at 120 schools

HAPPy MOVE - Junior Engineering Class

508 employees gave lectures to 6,109 children

EASy MOVE - Campaign for Mobility-challenged Children

assistive devices, living expenses and public awareness improvement programs for

mobility-challenged children

GREEN MOVE - MOBIS Forest (Meer Forest) in Jincheon

yearly construction plans developed and approved by the governing authorities

2015+


Progress on the Four ‘MOVE’ Campaigns

SaFe mOve Promotion of sharing practices throughout our supply chain by developing a

transparent umbrella program for suppliers

happy mOve Promotion of Junior Engineering Class with Chinese subsidiaries and partnerships

with related organizations locally

eaSy mOve Support of emotional and physical development for disabled children based on

support/benefit analysis results

GReen mOve Completion of first phase of construction with forest and riverside venues for

cultural and eco-friendly programs

No. of employee

volunteers in 2014

3,790 employees

Domestic social contribution

expenses in 2014

KRW 15.1 billion

No. of Korean groups/families in

sisterhood ties with MOBIS as of 2014

114 families/groups

education/Research

38%

environmental protection2%

Social welfare36%

arts & culture/Sports11%

Others9%

Global outreach4%

Mobility for

disabled children

Creation of

Meer Forest

Junior

engineering class

Transparent

umbrellas

Creating value from strategic CSR branding

activities

happy companionship

for a better tomorrow by

creating shared value

Realizing the unique value of

mOBiS as a specialized global

Oem auto parts supplier

Beautiful companionship

for socially vulnerable

groups

Campaigns

Goals

Vision


SAFE MOVE: One Small Step Forward for a Safer World

mOBiS distributes transparent umbrellas to children to help with their visibility when it is raining and watch for oncoming vehicles.

Since its launch in 2010, a total of 500,000 transparent umbrellas have been distributed to children at 826 elementary schools.

Essay contest to raise awareness about child safety on the roads in case of an emergency, each mOBiS transparent umbrella

has a whistle attached to it and light-reflective materials for safety purposes. another important element to this particular campaign is

raising public awareness, specifically among adults, about road safety for children.

To that effect, we held our 5th Transparent umbrella essay contest in 2014 in promotion of this same campaign. children, teachers and

parents are all invited to write essays, draw pictures, take photos or create road safety reports. in 2014, contestants inundated mOBiS

with a total of 789 entries.

Inviting feedback for improvements mOBiS maintains a quantified index of the benefits of its Transparent umbrella campaign

and the resultant benefits to its corporate image. in 2014, we ran surveys with 639 teachers and parents from 67 elementary schools

that we distributed transparent umbrellas to. The results showed that the campaign was effective in raising awareness among adults

about the importance of road safety with children. corporate awareness about mOBiS and its overall image also improved.

Future Plans for the Transparent umbrella Campaign

500,000 umbrellasTotal number of transparent umbrellas distributed in Korea between 2010-2014

508 volunteersNo. of MOBIS employees who gave lectures as part of the Junior Engineering Class program in 2014

1,390 hoursTotal hours of talent donation by employee instructors in 2014

25,000 umbrellas No. of transparent umbrellas distributed in China in 2014

HAPPy MOVE: Fostering Future Leaders

in dealing with the dearth of qualified personnel who make the natural sciences and engineering their professions, mOBiS has been

running a Junior engineering class for children since 2005. in 2014, we segmented the program into regular, role-playing and one-day

event classes, instilling dreams and hope in some of our future scientists.

Regular, Role-playing, and One-day Event Junior Engineering Classes The regular Junior engineering class is for elementary

school students in the neighborhood of our business operations. in 2014, we gave seven classes to 455 students at 14 schools, with a

total of 3,185 students participating in the class. The role-playing Junior engineering class began in 2014, offering classes that utilized

a dedicated science bus, while also giving classes where experiments are carried out. a total of 1,653 students from 16 schools across

Korea attended the classes in its inaugural year of operation. The one-day event classes are mostly given at events put together or partici-

pated in by mOBiS at the event site. in 2014, we gave classes at special camps for 1,271 children of mOBiS employees, ran a youth bas-

ketball camp, and organized motor sports events and other customer promotion events, as well as marketing campaigns aimed at adults.

Collecting feedback for future improvements mOBiS maintains a quantitative index of participants’ satisfaction level of its Junior

engineering classes. in 2014, we had 10 teachers and 262 students from 14 schools evaluate our program. The findings showed that

the program effectively contributed to raising awareness regarding science and to improving our corporate image.

Future Directions for Junior Engineering Classes

No. of Transparent umbrellas Distributed by year (domestic, cumulative)

2014 Junior Engineering Class Performance (Domestic)unit: umbrellas

2012 2013 2014

556

300,000

706

400,000

826

500,000

number of beneficiary schools cumulative number of umbrellas distributed

Regular

Role-playing

One-day events

total

No. of instructors

405

20

83

508

No. of beneficiary

schools

14

16

5

35

No. of participating

students

3,185

1,653

1,271

6,109Specialized programs employees’ talent donation

publishing new educational

materials that also includes

our automotive technologies;

giving opportunities to carry

out experiments

employees’ volunteering

and cultivating expertise in

lecturing

SAFE MOVE CHINA

mOBiS has also initiated a Transparent umbrella campaign in china. in 2014, we distributed 25,000 transparent umbrellas to local children

in Jiangsu, as well as one district in Beijing. Furthermore, mBJ (Beijing hyundai mOBiS automotive parts co., ltd.) was sponsored by the lo-

cal governments of Shunyi district, Beijing, and Qi che cheng for its first transparent umbrella distribution event, helping foster solid connec-

tions with local authorities. children who took part in the event were also invited to a tour around our local plant. Since then, we have made

this campaign a regular part of our cSR activities in china.

HAPPy MOVE CHINA

in September 2014, mOBiS gave its first Junior engineering classes in china, reaching 120 students at yancheng 3 elementary School, which

is located within the economic Technology Development Zone of yancheng, a city in Jiangsu province. at the event, 10 undergraduate stu-

dents from the automotive engineering Department at yancheng college of engineering volunteered to give classes on carrying out experi-

ments, further promoting the value of our global outreach commitment.

Mobis Child Road Safety Promotion Program

participation

among diverse

stakeholder groups

Fulfillment of social

responsibilities

as an auto parts

supplier

established as

the signature

cSR campaign for

mOBiS

contributed to minimizing traffic accidents involving children

Transparent umbrella essay contest awards ceremony Role-playing Junior engineering class1st Transparent umbrella Distribution event in Beijing’s Shunyi district Junior engineering china

A cutting-edge auto parts company that instills dreams and hope in children regarding science


Scenic water woods

Observing the scenery reflected on the body of water body at chopyeong Reservoir

Woods for learning about geological history

Observing the geological features and wildlife of the woods

Future cultural woods

experiencing the synergy between the traditional value of ecology and its future value

Woods for philosophic thinking

a place to casually walk and contemplate

Fairytales of natural ecology

Observing the properties of local vegetation and birds

Vegetation landscape and aesthetic woods

a scenic view of the gardened landscape

MOBIS Forest (Meer Forest) Landscape

50 childrenNo. of beneficiaries of the mobility assistance program in 2014

1,800 centersNo. of centers that were given picture books for raising public awareness about disabled children

EASy MOVE: One Small Step Forward for Disabled Children

mOBiS offers all-round support programs to mobility-challenged children and their families in various forms. in June 2014, we signed an

mOu with the prume Foundation, a specialized social welfare group for disabled children, and easy move, a social enterprise special-

izing in assistive devices for mobility-challenged people.

Selecting beneficiaries every year, we select 50 children under 18 years of age who were either born with a disability or suffered a

disability as a result of a traffic accident based on the submitted application forms, expert panel reviews, and fact-finding inspections.

Those children who are selected as part of this program benefit from comprehensive support as described below.

Three major support programs in 2014, mOBiS selected 50 beneficiary children with disabilities for its support program. To begin,

we manufactured customized assistive devices by commissioning one of our partner companies, easy move, to build 91 devices (within

a limit of KRW 3 million per beneficiary) and then donated the products to the 50 beneficiaries. each device is under warranty for a two-

year period. another important part of our program is sponsoring their living expenses, specifically rehabilitation expenses and living

necessities bills, in order of priority.

in november 2014, we held the first mOBiS Family Trip for Disabled children for 57 disabled children and their families, and in which

mOBiS employees also participated as volunteers. We also arranged for famous Korean artists and writers who have overcome dis-

abilities, including the writer Ko Jeong-wook and the visually-challenged painter Kang Ju-hye, to publish a special picture book to raise

public awareness about disabled children. The books were distributed to 1,800 centers that are members of the Korea association of

community childcare centers and the Korea association of children’s libraries.

Assistive Device Donation Performance

108 haThe size of Meer Forest

245 speciesRange of biodiversity at Meer Forest

GREEN MOVE: Planting Forests for Communities

mOBiS is planting a 108-hectare forest named meer (meaning “dragon” in Korean) in the vicinity of chopyeong-myeon, Jincheon. This

project is further proof of our commitment to strengthening our corporate reputation in local communities.

Renaming MOBIS Forest Meer Forest The mOBiS afforestation project began with the signing of an mOu with Jincheon county

and the national nature Trust in 2012. in 2014, we renamed the forest meer, the Korean word for “dragon,” which also carries with it

the meaning of ocean, great bounty, and immensity. circling around the forest are miho Stream and chopyeong lake, which together

resemble a dragon ascending to the heavens. Given the fact that the neighborhood is also home to several well-known dragon tales,

the new name of the forest embodies mOBiS’s commitment to creating a community-friendly forest.

Protecting biodiversity at Meer Forest The meer Forest site is home to 187 species of plants, 42 species of birds and mammals,

and 16 species of fish. Before planting any trees there, we ran an extensive preliminary study on the area’s ecosystem and developed

plans to protect the natural habitat as well as the existing flora. We are reusing the on-site tree wood for benches, stairs, steps, and

other habitat facilities, while using only eco-friendly materials such as non-toxic paints and untreated wood. in order to minimize dam-

age to the land, we are also making full use of the existing custom trails and forest roads, while carefully transplanting various types of

scenic plants to create a rich, beautiful forest.

No. of units

Assistive devices for personal medical

treatment

16

total

91

Assistive devices for personal mobility

33

Assistive devices for training in daily living

activities

18

Assistive devices for body positioning

24

unit: units

Portion of an essay from the mother of a disabled child

“On our way back home, everyone said they really enjoyed the trip and it was a really special time. personally, i’d like to express my special

thanks because this trip gave my husband and me an opportunity to better understand each other. it also allowed us to temper the hatred

and resentment which had previously existed between us before the trip. my husband pledged that he would commit himself more to the

family and to the care of our children. in return, i gave him my word that i would try to better understand where he was coming from. my

special thanks to mOBiS and the prume Foundation for their generous support of assistive devices, therapy expenses and this wonderful

family trip.”

Kim In-sook

Meer Forest CI

Background

The creative identity (ci) was developed to

represent meer Forest based on extensive

research centered around the history, culture,

and environment of Jincheon.

connotation of the ci

The meer Forest ci symbolizes a beautiful

and mysterious forest in which a dragon lives.

in addition, the automobile-shaped white

forsythia denotes mOBiS’s identity.

a ceremony marking the delivery of disabled children’s assistive devices for personal mobility Family trip for disabled children’s families


employees

Human Resources Management

in a bid to motivate employee engagement and effectively manage our human resources, mOBiS operates a systematic framework that

encompasses recruitment, training, and use of talent to evaluate and compensate employees based on their performance. Based on

our clear understanding of each employee’s individual competencies, we assign them to job positions befitting their talent, while also

providing them with individualized training programs in support of self-development. in addition, we evaluate their performance results

based on objective criteria and then compensate them according to their accomplishments.

Performance-based Evaluations and Compensation at mOBiS, employee performance is evaluated in two aspects: individual

competencies and performance results. individual evaluations are made based on individual competencies in consideration of team

performance as measured by Kpis (key performance indexes). The Kpis reflect management’s annual goals, with the evaluation scheme

sharing the same approach to all teams. each performance indicator is classified into quantitative and qualitative indicators to ensure

objectiveness in the evaluation results. There is swift feedback whenever a target is not reached. Team members are evaluated on their

competencies, while team leaders are evaluated for their leadership based on a multilayered evaluation criteria list. as part of our meri-

tocracy policy, compensation is made differentially to managers and above levels, according to their evaluation results. The working-

level committee for personnel management and the headquarters-level hRm committee determine promotions only after reviewing

employee performance in consideration of language skills, certificates, and completed training. Those with outstanding accomplish-

ments qualify for promotion regardless of their seniority.

Individual Performance Evaluation

756 personsNew employees (4th grade and above)

KPI-based evaluation

Multi-layered evaluation

Compensation linked to relative evaluations

No. of employees evaluated

8,170

8,170

8,170

No. of employees compensated

8,170

463

2,936

Percentage

100

6

36

unit: persons, %

Domestic New Employees

800

600

400

200

0

unit: persons

2012 2013 2014

397 418

756

80.9%

Domestic & Overseas Workforce

32,000

24,000

16,000

8,000

0

unit: persons

2012 2013 2014

19,132 20,534

22,842

12,823

14,672

11,951

8,1707,7117,181

11.2%

Domestic Overseas

2014

PROGRESS IN 2014

Individualized HRD Programs

individual Development planning (iDp) program, overseas subsidiaries’ job expert training,

and language programs

Safe Worksites

establishment of a safety & health management system that minimizes risks at worksites by

abiding by all basic safety rules

Maximizing Employee Satisfaction

enhancing working conditions through the 3S (smart policies, smart infrastructure, and smart

balance) initiative in support of employees’ work-life balance for higher employee satisfaction

2015+


upgrading the HRD Programs

establishing a system to motivate self-learning developing hRD competencies and systems at

overseas subsidiaries and reinforcing hRD management competencies

Enhancing Core Value Practices

internalizing mOBiS’s core values through a number of seminars and programs to motivate

practices in employees’ daily duty fulfillments

Establishing an Accident-free Workplace

establishing a safety-first corporate culture that strictly follows the basic principles of enhancing

companywide safety awareness, and establishing an effective management system

Average service years of

MOBIS employees

12.8 years

Total number of workers in

Korea and overseas

22,842 persons

Per-employee

training hours

122 hours

core value SeminarceO Town hall meeting

• Figuresincludeexecutivesandcontract-basedemployees • Theabovefiguresrepresentonlyresearchersandmanagerial-levelofficialsofthe4th

grade and above.


Hyundai MOBIS Business Academy in 2014, we offered 22 courses as part of our in-house development job training program to

all employees, helping them better understand each other’s jobs and functions. Staff members dispatched overseas and locally hired

employees are provided with online programs for language skill brush-up sessions and cross-cultural understanding. however, we

also train instructors who help our overseas employees reinforce their competencies. Furthermore, we have developed an individual

Development plan (iDp) that assists employees in their self-realization and growth efforts, and which fall in line with corporate accom-

plishments. Based on individual competency assessment results, employees can consult their iDp mentors, who then help them come

up with their own competency-building programs to attain their goals. at mOBiS, team managers usually serve as mentors to their col-

leagues, providing a sound opportunity for communication within the team. in support of self-directed learning, the company has also

established various other means of assistance, such as a credit system, structured on-the-job training (S_OJT), community of practice

(cOp), and educational attainment-linked personnel management (promotion qualifications).

(Hyundai MOBIS Business Academy) 2020

2014 Training Expenses Breakdown

Human Rights and Labor Laws

mOBiS has established a corporate culture that respects human rights and employees’ labor rights, promotes diversity, and does not

tolerate any form of discrimination, which is backed up by a number of mOBiS-based programs. The cyber auditor Office is open to

reports on unethical conduct and wrongful decisions, including infringement on human rights and order corrections or punishments. The

companywide evaluation against ethics indicators, corporate culture diagnosis, core value surveys, and employee engagement surveys

are instrumental for the company to keep abreast of employee sentiment, communication, work-life balance, work-related stress, and

ethics awareness. These research results are then reported to the management board for reflection in innovation initiatives at each divi-

sion level. Furthermore, mOBiS faithfully abides by local labor laws and related regulations in all countries it operates in, and respects

local cultures and social customs in its personnel management practices.

mOBiS is also a union shop that guarantees the right to form unions, representative bodies, and collective bargaining under all re-

lated laws and regulations in Korea and overseas, as well as the right for them to carry out union activities. in 2014, 4,948 people, or

61 percent of our total workforce, were entitled to collective bargaining. mOBiS arranges quarterly collective bargaining and labor-

management council meetings, and hosts monthly labor-management joint business presentations to strengthen mutual partnerships.

moreover, the company strictly abides by all laws and regulations regarding human rights and labor, and extends generous working

conditions and fringe benefits under its collective bargaining agreements that more than meet legal requirements.

Promoting Diversity at Work as of 2014, mOBiS’s female employees stood at 888 people, accounting for 10.9 percent of the do-

mestic workforce, and that number is steadily increasing. in promotion of diversity with companywide perspectives and creative ideas,

the company has been strategically training and fostering female managers since 2008, while also fostering ideal conditions to help

female employees realize their full potential at work.

in accordance with article 37 of the labor Standards act’s enforcement Decree, we strictly prohibit female workers from dangerous

or harmful tasks, and do not tolerate any form of sexual harassment in the workplace, with violations punished under article 12 of

the Sexual equality employment act. in march 2014, mOBiS launched its Sexual harassment consulting Window, where 23 male and

female counselors provide prompt and indiscriminate consulting services when needed. Based on the advice of the counselors, serious

issues are reported to the Ombudsman center via the website ([email protected]) and followed up with appropriate measures from

the hRm committee. in support of employees in their attempt to maintain a healthy work-life balance, and to prevent female workers

from unwillingly have to interrupt their careers, the company has in place advanced parental leave programs and encourages employ-

ees to take such leaves when necessary. after labor and management reached an agreement on an in-house childcare center through

collective bargaining, the first such center opened at the Jincheon plant in 2014, allowing employees with children to come back to

work earlier than in the past.

Number of Female Managers

Training hours

Per-employee training hours

Training expenses (KRW in billions)

Per-employee training expenses (KRW 10,000)

2012

620,840

91

7.5

111

2013

755,000

102

8.2

112

2014

952,868

122

9.5

122

Employee Training

Female Workforce

40

30

20

10

02012 2013 2014

17

23

33

+43.5%1,000

750

500

250

0

unit: persons

2012 2013 2014

682

813888

+9.2%

Job competencies

37%

leadership33%

core values18%

Global12%

122 hoursPer-employee training hours in 2014

888 personsNo. of female employees as of 2014

KRW 9.5 billionTotal employee training expenses in 2014

43.5 %year-on-year growth rate in the number of female managers compared to 2013

HMVC (Hyundai Mobis Value Center)

• Buildingavalue-orienteddynamiccorporateculture

· communicative

· performance-oriented

HMLC (Hyundai Mobis Leadership Center)

• Achievingfield-orientedcreativeleadership

· Fostering autonomous leaders with high levels of

accomplishment

· upgrading leadership training

HMPC (Hyundai Mobis Professional Center)

• Pursuingprofessionalexcellence

· creating an on-site continued learning system

· Strengthening self-directed learning systems

HMGC (Hyundai Mobis Global Center)

• Buildingglobalcompetencies ·Traininggloballycompetitiveemployees

·BolsteringHRDatoverseassubsidiaries

HMMC (Hyundai Mobis Management Center)

• EnhancingsystematicHRDmanagementcompetencies ·EstablishingaGlobalHRDmanagement

system

·DevisingaglobalHRDinfrastructurehmvc hmmchmpc

3 DirectionsField-orientedperformance-

based

Self-directed

hmGchmlc

HMBA 2020

• “Employees”representdomestic full-timeregularstaff,excludingexecutivesand

contract-based employees.

• “Managers”referstoemployeeswhoserankismanagerorabove.


MaternityLeavesandChildcareLeaves

Developing an Open Corporate Culture mOBiS strives to ensure that every employee is on the same page when it comes to the

internalization of its core values so that it can maintain a great workplace. Since 2010, the company has been holding team-based

seminars and business-/division-based seminars to promote a communicative and cooperative corporate culture. in 2014, a total of 230

seminars were held for 285 teams. additionally, the ongoing companywide campaigns are helping strengthen the work environment,

such as meeting and reporting practices, work instructions, dining and drinking, and work etiquette. Since 2011, we have been conduct-

ing annual surveys to monitor the internalization and practice of core values and develop improvement plans based on these results.

2014CoreValueSeminars

Promoting Companywide Communication in an effort to establish a communicative and trust-based corporate culture, mOBiS

holds regular ceO Town hall meetings on a companywide level to make sure that the entire workforce is well-versed with the ceO’s

and the company’s business plans and future directions. in 2014, a total of 4,100 employees attended 18 such sessions. We are also

increasing the number of inter-departmental communication programs and eligible teams.

A Healthy Work-Life Balance mOBiS demands that all its employees abide by the basic work rules in their daily duty fulfillment,

while proactively attending to any inefficiencies or irrationality in the work process. For instance, we mounted a paperless campaign

in 2014 and instead established an electronic-based document work process. in a bid to help employees maintain a healthy work-life

balance, every Wednesday is now designated Family Day, so all employees are obliged to leave work on time. We also continuously run

back-to-basics campaigns to help employees increase their work engagement efficiency.

Health & Safety Management System & Framework

as of 2013, mOBiS had obtained the OhSaS18001 international certificate (Occupational health & Safety assessment Series) and the

KOSha18001 (Korea Occupational Safety & health agency) certificate on all its domestic production lines. The Occupational health

& Safety management System (OhSmS) reflects health and safety policies in corporate management policies and stipulates detailed

action plans and guidelines for application in day-to-day duty fulfillment. Our overseas operations are also working to obtain the Oh-

SaS18001 certificate, and we plan on expanding our certification acquisition at all our overseas production lines by 2015.

under the shared goal of achieving an accident-free workplace, both labor and management closely collaborate in various health and

safety initiatives, taking corrective measures with all issues found in quarterly health & safety inspections. also underway are diverse

activities to establish an autonomous safety management system. Worksites are setting annual goals and reporting on progress rates to

the management board, while the headquarters devises companywide health & safety Kpis and runs divisional-level inspections, offer-

ing rewards for outstanding performance results.

in meeting the growing public need for its sustained social responsibility and increased control over safety/environmental risks, mOBiS

set up a Safety & environment Team in 2014 that is now in charge of companywide health/safety/environmental management activi-

ties. The Safety & environment Team does its utmost to eliminate accidents through comprehensive health & safety checks, training and

campaigns.

Supporting the Health of Employees mOBiS cares about the health of its employees. To that end, it operates in-house workout

rooms at each worksite/regional center, in-house cafeterias that are commissioned to an external catering service, and a “Quit Smok-

ing” campaign in alliance with local public health centers. in may 2012, we also opened an in-house psychological counseling center

called DooDream at our main research center. at DooDream, qualified psychologists operate a number of counseling programs. By

offering specialized counseling services tailored to the different needs of each team, the program has received a warm response from

researchers who have already used the service. in 2014 alone, this included 201 researchers and 25 teams. in July 2014, healing Sam

opened at our head office building, in which two clinical psychologists work as full-time employees in charge of the psychological

health of our employees. in only six months, a total of 180 employees received counseling services on a wide range of issues regarding

their work and personal life. in the near future, we plan on opening more of these centers at our plants in other regions.

Team seminars

Division-led seminars

Beneficiaries

285 teams

entire division

No. of trainees

4,394

225

No. of sessions

230

10

2013

62

60

100

100

63

176

81

83

2014

77

71

100

-

76

150

-

-

444 risk factorsNo. of harmful risk factors addressed through the STC campaign at plants in Gyeonggi-do in 2014.

285 teamsNo. of teams that attended the 2014 Core Value Seminars

4,100 personsNo. of employees who attended the companywide town hall meetings in 2014

· STC Campaign at Gyeongin Plant

mOBiS’s Gyeongin plant partners with its suppliers for its health & safety program, which we call STc. an abbreviation of Stop, Think and

check, the STc campaign is an on-site health & safety management program to prevent occupational accidents within our premises. By

uncovering potential risk factors at worksites and keeping a record of all findings, the campaign also includes raising questions to the

company’s safety management teams for improvement initiatives. at the end of every year, process lines, suppliers and team performance

results are reviewed in terms of participation, risk rates, and improvement results, after which top management then provides incentives and

rewards to those who score best. in 2014, a total of 467 hazardous risk factors were detected, while most of them (except for 23 cases that

require a long-term approach) had completed all improvements.

· Health Promotion Program at Changwon Plant

mOBiS’s changwon plant runs a health check-up program to prevent cerebro/cardio vascular diseases for its aging workforce. Based on the

results, employees vulnerable to such diseases are advised to monitor their health conditions more stringently. The company also has in place

a no Smoking campaign to realize a healthy, happy workplace that is in line with the government’s own Stop Smoking campaign.

· Health & Safety Program at ulsan Plant

To aid in its suppliers’ health and safety management, mOBiS has in place a legal program that is supported and receives advice from the

ministry of employment and labor. By reviewing the working conditions of suppliers, we assess the potential risks at their worksites and

help with their improvement initiatives in the event that a risk factor is detected. The ultimate goal is to bring our suppliers’ worksite condi-

tions to the same level as our own worksites when it comes to health and safety management practices. Through quarterly progress checks,

we assist their programs and receive audits by an evaluation board consisting of external experts from both the public and private sectors.

Safety checkhealing Sam, a psychological counseling center

Maternity Leaves

Childcare Leaves

no. of employees on maternity leave

per-employee days of leave

Rate of returning to work after a leave (%)

Rate of working for at least 12 months or longer after returning to work (%)

no. of employees on childcare leave

per-employee days of leave

Rate of returning to work after a leave

Rate of working for at least 12 months or longer after returning to work

2012

75

71

100

98.6

69

158

99.0

95.6

• Employeeswhotooktheseleaveswerenotdiscriminatedbygender.The2014rateofworkingforatleast12monthsorlongerafterreturningtoworkandthe2014rateofreturningafter

childcare leave will be available at the end of 2015.


Environmental Management System

mOBiS pursues environmentally sustainable management practices throughout its value chain. in fact, our impact on the environment

is the first priority we consider in developing business strategies, from R&D and procurement/logistics to production, sales and disposal

of products, and recycling.

as a dedicated team, the Safety & environment Team sets company-wide directions in environmental management as well as action

plans for each division level, reporting on key issues and progress made to the management board. as of December 2014, all our opera-

tions, including 29 plants and 27 aS parts operations at home and abroad, had obtained the iSO 14001 certificate, the international

standard for environmental management systems, and which is renewed every year through certification review.

Maximizing Environmental Efficiency

Input & Output Flowchart (domestic)


environmental Management

Input Output

Environmental Management

upstream

Downstream

Suppliers

mOBiS

(production)

customers

Climate change mitigation

Integrated environmental management system

hazardous substance management

Eco-friendly supply chain management

Efficient resource use

Environmentally clean production

Solvents6,329 tons

plastics39,603 tons

metals311,104 tons

Water use 1,096,000 tons

electricity2,265 TJ

Fuel 342 TJ

Die Forging

Forging

Casting

Processing

welding

Painting

Assembling

Manufacturing

Greenhouse gas emissions

129,091 tCO2eq

air pollutants45 tons

Recyclables9,753 tons

Waste 16,633 tons

Water pollutants 23 tons

-0.5 %Change in emissions intensity of greenhouse gas emissions compared to 2013

2014

PROGRESS IN 2014

upgrading Mobis Green house gas Management System (MGMS)

improving the mGmS for effective management of greenhouse gas emissions

Expanding Waste Recycling

enhancing waste recycling rate by carrying out voluntary agreement on plastic waste recovery

and recycling of automotive a/S parts from 2011 and Korean epR system on synthetic resin

packing materials in 2014

Public disclosure of Carbon Management Information

carbon Disclosure project evaluation results: 92 points in the carbon disclosure leadership index

(cDli) and a B grade in the carbon performance leadership index (cpli)

2015+


Reinforcing environmental management competencies

Reducing greenhouse gas emissions and responding to climate change

Establishing an efficient energy management system and reducing energy consumption

Expanding waste recycling and the resource circulation system

Strengthening stakeholder communication for enhanced environmental performance

Change in domestic consumption intensity

of water resources compared to 2013

-7.6 %

Change in domestic emissions intensity of

air pollutants compared to 2013

-12.8 %

Change in domestic discharge intensity of

waste compared to 2013

-5.0 %


Pollutant Emissions & Control (Output)

GHG Emissions Control in a bid to mitigate climate change, mOBiS operates its in-house developed mGmS. To ensure the credibility

of the data, the company’s GhG emissions are assured by a third party in accordance with principles as stipulated by the iSO 14064

standard. The company also discloses its GhG emissions control activities as a member of the carbon Disclosure project (cDp). mOBiS

was designated as a controlled entity in 2014 and subject to management under the Framework act on low carbon Green Growth

(enforcement on april 14, 2010) and Guidelines for the Operation of Target management Scheme (amended on november 5, 2011 by

notification no. 2012-211 of ministry of environment). Starting in 2015, we will submit implementation plans for mitigation targets,

emissions reports and implementation reports to Korean government.

in the meantime, we have continued to enhance efficiency in logistics through efforts such as improving logistics for exports/imports

and cKD air transport, optimizing global transportation systems, and computerizing all our logistics systems. as a result, the company

saved approximately KRW 17.8 billion in logistics expenses at home and abroad in 2014, which was also effective in reducing our GhG

emissions in our transportation and logistics activities.

Production Technologies for Saving Energy

Waste, Recycling, and Reproduction mOBiS manages the entire process of emissions, transport, and treatment of waste by apply-

ing an online waste legal treatment system, and strives to raise the recycling rate of waste all the time. under voluntary agreement on

plastic waste recovery and recycling of automotive a/S parts from 2011 and Korean epR system on synthetic resin packing materials

in 2014 the ministry of environment, we apply diverse efforts to raise our recycling rate of automotive a/S parts that contain plastics.

in 2014, a total of 16,633 tons of waste were generated from mOBiS’s domestic operations, and 58.6 percent, or 9,753 tons, were re-

cycled. The remaining amount was incinerated or landfilled.

unit: TJ, TJ/KRW 100 millions

2012 2013 2014

0.0160.017 0.017

Overseas Domestic

consumption intensity

2,353

2,702

2,503

3,299

2,607

3,498

5,0555,802 6,105

Domestic Waste Discharge Volume

unit: 1,000 tons, ton/KRW 100 millions

2012 2013 2014

1,115

6.4

5.9

Total use consumption intensity

6.6

1,126 1,096

Domestic/Overseas GHG Emissions

unit: tons

2012 2013 2014

Solvents plastics/Rubbers metals

4,404

35,790

344,235

4,520

38,491

361,312

6,329

39,603

311,104

384,429357,306

404,323

Applicable Operations

Description

2007~2008

module plants & auto parts plants

air-conditioning facilities, air handling units (ahu), pumps, high-efficiency inverters, and high-efficiency lighting

2009~2010

auto parts plants and overseas plants

leD lamps, compressor inverters, ahu improvement, and coolant facility inverters

2011~2012

modules/auto parts/electronic equipment plants

leD general diffused lighting, compressor inverters, ahu improvement, and coolant facility inverters

2013~2014

aS parts operations, R&D centers, domestic and overseas plants

applying leD lighting technology and central light controlling systems, injection/evaporator/coolant water pump inverters, peak electricity control systems, integrated controlling of turbo compressors, and improving the insulation performance of heaters at the drying oven

-7.6 %Change in domestic consumption intensity of water resources compared to 2013

-5.0 %Change in domestic discharge intensity of waste compared to 2013

• Notethat2012and2013figureswererevisedfollowingtheredefinitionoftheorganiza-

tional boundaries.

Resource use and Input

Metals in 2014, mOBiS used 311,104 tons of metals (hot-rolled steel sheets, aluminum, copper and zinc) domestically, down 13.9

percent from 2013.

Petrochemical Products To increase fuel efficiency and recycling rate of end-of-life vehicle, mOBiS strives to raise the recovery rate

of its products and gradually phase in composite plastics to lighten the weight of its products, and ultimately the automobiles. Since

2010, we have adopted a process that collects and recycles fugitive paint powders that scatter during the coating lamp lens process,

thereby lowering the loss of solvents and raising efficiency. in 2014, our petrochemical product use increased by 2.9 percent and 40.0

percent in plastics/rubbers (39,603 tons) and solvents (6,329 tons) respectively.

Energy in 2014, mOBiS consumed 6,105 TJ (excluding contract manufacturing companies) of energy, with electricity accounting for

87.0 percent of the main energy source. The expanded production/manufacturing base resulted in a 5.2 percent year-on-year increase

in the total use, but consumption intensity remained 0.017 TJ/KRW 100 million. Since 2014, we have been employing an overnight auto

recharging system at our logistics centers and are now reviewing the installation of energy storage systems and solar power generators

at the same facilities. By 2018, we aim to establish green renewable energy self-generators to reduce our energy costs and cO2 emis-

sions.

Water Resources in 2014, mOBiS consumed 1,096,000 tons of water resources, 2.7 percent less than the previous year. consump-

tion intensity also improved by 7.6 percent over the same period, cutting down on input and realizing higher efficiency. These improve-

ments owe much to our efforts to raise the reuse/recycling rate by addressing the cooling tower’s overflow and increasing the recovery

of steam condensing water. characteristic to the assembly process, our total use of water resources is not very large, and we make use

of industrial water and water services, neither of which have an influence on biodiversity.

Domestic/InternationalEnergyConsumption Domestic Raw Material use

Domestic Water Resource use

2012 2013 2014

0.81

0.84 0.84

Overseas Domestic

emissions intensity

116,958

133,747

124,075

163,118

129,091

173,123

250,705287,193 302,214

unit: tons/KRW 100 millions

2012 2013 2014

0.12

0.09 0.09

Total emissions (general/designated)

Discharge intensity

20,756

16,615 16,633

unit: tcO2eq, tcO2eq/KRW 100 million

• Notethat2012and2013figureswererevisedfollowingtheredefinitionoftheorganiza-

tional boundaries.

68 mOBiS SuSTainaBiliTy RepORT 2015 69appenDiX

Pollutant Emissions Control mOBiS manages and controls its pollutant emissions by means of both pollution prevention facilities

and regular monitoring, while preparing for accidental leakage of pollutants through continued facility checks and improvements.

Generated from the coating/painting process, volatile organic compounds(vOcs) are one of air pollutants discharged from our plants.

They are also the precursors of global warming and photochemical smog. mOBiS has operated a regenerative thermal oxidizer (RTO)

to minimize its emissions of vOcs and applies an advanced RTO to reuse pollutants as heat energy during oxidization process, reducing

emissions and fuel energy consumption at the same time. We also increase the use of water-based paints in our painting process to

reduce air pollutant emissions, while optimizing environmental facilities and replacing old air pollution prevention facilities to minimize

our impact on air quality.

With respect to water pollutant control, the company treats all wastewater from washing automotive parts at wastewater treatment

facilities at each plant before discharging it to the public sewer or retreating it at public sewage treatment plants, applying more rigid

standards of wastewater treatment to remain 50 percent stricter than legal requirements.

Hazardous Substance Management mOBiS operates a material information management system for the systematic management

of chemical substances in response to chemical substance regulations of countries where it operates. By connecting the system with

its automotive parts management system, the company promptly answers stakeholder requests for its products’ environmental impact

information. Furthermore, mOBiS constantly monitors the international material Data System (imDS) and collects information on listed

hazardous substances of automotive parts so that it can promptly respond to any significant change to the database.

Restrictions on the use of Four Heavy Metals and Ozone Layer destroyers The hyundai motor Group has in place Global Stan-

dards for the Four heavy metals to meet the requirements necessary as outlined in global regulations on control of end-of-life vehicles

(elvs). accordingly, mOBiS controls its use of the four regulated materials (lead, cadmium, hexavalent chromium, and mercury) in all its

components and raw materials, and is always striving to develop substitutes for these metals. additionally, we have signed numerous

green components/parts supply agreements with suppliers not to use these substances, while supporting their use of substitutes that

have little or no environmental impact.

R&D Efforts for Eco-friendly Materials mOBiS monitors the hazardousness of raw materials and restricts the use of hazardous

substances. Furthermore, the company continues to develop substitutes for these substances.

For instance, mOBiS successfully developed a lead-free soldering process for its electronic devices, which began mass production in the

second half of 2014. having completed reliability tests on its commercial feasibility, we are now expanding the application to our prod-

ucts in preparation for the european union’s end-of-life-vehicle Direction, which takes effect in 2016.

another good case in point is the eco-friendly bio plastics made from a plant-based poly lactic acid. applicable to automotive interiors, this

material was the successful result of joint research between mOBiS and the hyundai motor Group, and is currently going into the mass

production of bio composite materials, with additional R&D efforts underway for additional technologies that can be derived from it.

Domestic Water Pollutant Emissions Domestic Air Pollutant Emissions

unit: tons, kg/KRW 100 million

2012 2013 2014

0.40.3

0.2

Total emissions emissions intensity

60

4945

unit: tons, kg/KRW 100 million

2012 2013 2014

0.12 0.12 0.12

Total emissions emissions intensity

19.6 20.722.7

-12.8 %Change in domestic emissions intensity of air pollutants compared to 2013

0 4

A p p e n d i x

Appendix

70 Sustainability management

71 management performance

72 Win-Win partnerships

73 customer Relations management

74 Social contribution

75 employees

77 environmental management

79 Greenhouse Gas emissions assurance Statement

80 Third party assurance Statement

82 GRi index

mOBiS reports its sustainability management progress and results in economic, social and environmental

performance, and reviews and improves its performance against international reporting guidelines. We also

have the report assured by an independent assurer and consult with sustainability experts to further the

credibility of the report.

70 71appenDiXmOBiS SuSTainaBiliTy RepORT 2015

4-1. SuSTAINABILITy MANAGEMENT

mOBiS has been a member of the un Global compact (unGc) since July 2, 2008. initiated by then-un Secretary-General Kofi annan, the unGc was designed to encourage businesses around the world to adopt sustain-

able and socially responsible business activities. consisting of 10 principles in four business management areas—human rights, labor, environment and anti-corruption—mOBiS upholds all 10 unGc principles in every

one of its business activities and has provided information about the company’s performance in these areas through this report.

uN Global Compact Business Results KRW in millions

Sales

Gross profit

Operating income

Earnings before taxes

Net income

2012

30,789,019

4,544,184

2,906,385

4,607,272

3,542,013

2013

34,198,594

4,812,948

2,924,404

4,534,545

3,396,421

2014

36,184,974

5,179,752

3,070,594

4,583,813

3,392,512

Financial Conditions unit: KRW in millions

Total assets

cash & equivalents

Liabilities

Borrowings

Equity capital

Shareholders’ equity

Debt-to-Equity ratio

2012

30,046,996

2,796,229

13,007,282

2,570,920

17,039,714

491,096

76.3%

2013

34,430,309

2,475,832

14,237,123

2,922,307

20,193,186

491,096

70.5%

2014

39,111,916

2,911,441

15,825,813

2,856,450

23,286,103

491,096

68.0%

Key Financial Strategies

Growth/Profitability

Activity

Stability

Indicators

By contributing to client companies’ competitiveness, we are maintaining qualitative growth on the back of technological and quality competencies, while further solidifying the fundamentals for quantitative growth. at the same time, we will further stabilize our revenue structure by expanding our global client portfolio.

By establishing a global management system, we are heightening our preventive measures and work efficiency through prompt and precise troubleshooting measures. as we develop a standardized process in consideration of local needs, we will ensure continued innovation and improvements with all of our processes.

Regular capital needs forecasting and adjustments will allow us to effectively manage liquidity risks and keep our investments in core competencies at a sustainable level.

Financial Highlights unit: %

Growth

Profitability

Activity

Safety

Indicator

Sales growth

Operating profit ratio

net profit margin

economic return on equity

Total assets turnover

inventories turnover

Debt ratio

Description

external growth

Operating performance

Business activity efficiency and profitability

profits generated from capital investments

effective use of corporate assets

Turnover ratio of inventories

Financial stability

2012

17.1

9.4

11.5

20.8

102.5

13.8

76.3

2013

11.1

8.6

9.9

16.8

99.3

13.7

70.5

2014

5.8

8.5

9.4

14.6

92.5

13.2

68.0

Creation and Distribution of Economic Value unit: KRW in millions

Total Value Created

Sales

Other Revenue

Total Value Distributed

Government

Employees

Suppliers

Local Communities

Shareholder/Company

Creditors

Description

Sales & Other revenue

identical to total value created

Tax payments

Wages and fringe benefits expenses

product & Service bills

Donations

Dividends & Retained earnings

interest expenses

2012

32,093,215

30,789,019

1,304,196

32,093,215

1,115,973

1,336,639

26,036,872

13,423

3,542,013

48,295

2013

35,302,967

34,198,594

1,104,373

35,302,967

1,185,378

1,493,311

29,171,723

18,769

3,396,421

37,365

2014

37,250,160

36,184,974

1,065,186

37,250,160

1,249,066

1,674,563

30,885,094

16,011

3,392,512

32,914

Change (%)

5.5

5.8

-3.5

5.5

5.4

12.1

5.9

-14.7

-0.1

-11.9

4-2. MANAGEMENT PERFORMANCE

The 10 principles of the uN Global Compact

Human Rights

Labor

Environment

Anti-corruption

Description

principle 1: Businesses should support and respect the protection of internationally proclaimed human rights.

principle 2: Businesses should make sure they are not complicit in human rights abuses.

principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

principle 4: Businesses should uphold the elimination of all forms of forced and compulsory labor.

principle 5: Businesses should uphold the effective abolition of child labor.

principle 6: Businesses should uphold the elimination of discrimination in respect of employment and occupation.

principle 7: Businesses should support a precautionary approach to environmental challenges.

principle 8: Businesses should undertake initiatives to promote greater environmental responsibility.

principle 9: Businesses should encourage the development and diffusion of environment friendly technologies.

principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Reporting Pages

13~14, 61

13~14, 61

61

61

61

61

64~68

64~68

35~36

13~14

mOBiS participated in a number of socially responsible investment (SRi) review programs in support of

looking back on its social, environmental, ethical and other cSR performance and financial performance

results, including the Dow Jones Sustainability index (DJSi), the carbon Disclosure project (cDp) and

KOBeX Sm, to name but just a few. mOBiS then considered the feedback it was given and compared its

cSR practices with those of domestic and overseas best practices to further enhance stakeholder value.

External CSR Evaluations

although the Korea Fair Trade commission (FTc) ordered mOBiS to pay KRW 15 billion in fines for its

automotive parts marketing practices on June 5, 2009 under the monopoly Regulation and Fair Trade

act, the company appealed the ruling. in compliance with the final decision of the Supreme court,

mOBiS paid a KRW 3,317 million fine on april 10, 2014. We also faithfully followed all corrective orders,

announcements, and notifications. On august 30, 2012, the FTc also imposed KRW 2,295 million in fines

for mOBiS’s purchase practices. The company faithfully followed the FTc’s orders and improved its inter-

nal systems, while also training its employees to prevent a reoccurrence of the same violation.

Punishments and Violations

Association Membership Status

Association

Federation of Korean Industries

Korea Chamber of Commerce and Industry

Korea Auto Industries Coop. Association

Fair Competition Federation

uN Global Compact Korea Network

Korea Economic Research Institute

Korea Automotive Recyclers Association

Korea Intellectual Property Protection Association

Korea Industrial Technology Association

Korean Society of Automotive Engineers

Korean Academy of Motor Industry

Objectives

exchange of information on business management, collaboration on cSR activities

mandatory requirement by law to join this chamber

collaboration among relevant companies for the advancement of the automotive industry

exchange of information and opinions among government agencies and member companies for compliance on fair trade guidelines

commitment to abide by the 10 principles of the un Global compact

Research on short-term and long-term issues relevant to the development of the Korean economy and the country’s companies

promotion of improved environmental protection efforts by the auto industry and recycling of automobiles

advancement of industries and increased international competitiveness through increased protection of intellectual property rights

improved technology cooperation network and strengthened technology innovation capacity

advancement of automotive technologies through the active exchange of information concerning relevant technologies

advancement of the automotive industry through seminars and networking between experts

Awards Received

Awards & Achievements

Winner of the KRW 400 Billion Tower of National Tax at the 48th Taxpayers’ Day celebration ceremony

Listed to the 2014 Dow Jones Sustainability Indexes (DJSI) World

Named a CSR leader at the Next Society CSR SuMMIT 2014

Winner of the uSD 10 billion Export Tower at the 51st Korean Trade Day celebration ceremony

Date

mar. 3, 2014

Oct. 15, 2014

nov. 20, 2014

Dec. 5, 2014

Punishments & Violations

Cases and amount of hazardous substance leakage

Fines and non-monetary sanctions for violations of environmental regulations

Violation of Customer Information Security Act

Violation of marketing communication regulations

Violation of regulations and voluntary rules regarding product and service information and labeling

Amount of fines imposed for violation of regulations and rules on the supply of goods and services

Violations of the Fair Trade Act

2012

none

none

none

none

none

none

1

2013

none

none

none

none

none

none

none

2014

none

none

none

none

none

none

none

• MOBIScomplieswiththeFairLabelingandAdvertisingAct(FLAA)inallitsadvertisements,promotions,sponsorships,and

other marketing communication activities. Furthermore, its compliance program guidebook provides employees with a

summary of the Flaa, related punishments, and behavioral guidelines.

Sales Breakdown by Business Sector unit: KRW in millions

2014

2013

2012

36,184,974

34,198,594

30,789,019

28,863,777 1,058,362

6,262,835

27,022,332 956,354

6,219,908

24,060,214 839,708

5,889,097

modules & parts manufacturing aS parts auto Finance

Economic Value Distribution unit: %

Suppliers 82.90

local communities 0.05

Government 3.35

employees 4.50

Shareholders/company 9.11

creditors 0.09

Sales Breakdown by Region unit: uSD in millions

Europe

Americas

China

Others

Area

modules

aS parts

Total

modules

aS parts

Total

modules

aS parts

Total

modules

aS parts

Total

2012

2,442

848

3,290

4,688

1,070

5,758

7,395

609

8,004

622

638

1,260

2013

2,752

958

3,710

5,305

1,140

6,445

9,073

753

9,826

688

664

1,352

2014

2,996

1,004

4,000

5,545

1,365

6,910

10,042

812

10,854

733

705

1,438

Change (%)

8.9%

4.8%

7.8%

4.5%

19.7%

7.2%

10.7%

7.8%

10.5%

6.5%

6.2%

6.4%

• Salesofeachsubsidiaryfromthesameregionwerelumpedtogether.


4-4. CuSTOMER RELATIONS MANAGEMENT

Repair parts auto Refill System: mOBiS operates an auto parts repair department within hyundai-Kia

motors service centers. upon running out of any item that had been sold at least once within the past

year, the inventory of the product(s) in question is automatically refilled. mOBiS will further enhance

its system operations in order to ensure that its end-users and customers can find the component they

require and whenever they need it.

Repair parts Reservation: Taking note of the fact that items usually take 7 to 15 days from reservation

to warehousing, mOBiS makes reservations for what it believes will be components in need prior to any

given period, thereby improving the effective shortage rate and the speed of repair work.

vOc handling by Type: mOBiS runs a customer service center that addresses customer inquiries and

complaints on all its products currently on the market. complaints received through these customer cen-

ters are forwarded to related departments/teams at the company’s headquarters and receive a prompt

response. as with all requests for components, the requested product(s) usually arrives at the nearest

one of our stores within two days of the request to maximize customer satisfaction.

Customer Satisfaction Activities

Customer Satisfaction by Type

customer Satisfaction index (cSi) refers to customer satisfaction at the retail level for those who have

visited any mOBiS repair shop. in 2014, we asked 67 detailed questions online about how customers feel

about the attitude mOBiS employees exhibit, our employees’ level of service, and customer satisfaction

with mOBiS products in general. The Dealer Satisfaction index (DSi) serves as the barometer of customer

satisfaction with our wholesale dealers’ service and products for aS parts. We asked 85 questions online

about the overall attitude of our employees when it came to customer service, the company’s support,

and respondents’ satisfaction with mOBiS products overall. With the Repair Shop Satisfaction index (RSi),

it indicates a repair shop’s satisfaction in working with dealerships. We also surveyed suppliers and other

repair shops in general with 53 questions on dealers’ customer service attitude, service at dealerships,

and general satisfaction levels with mOBiS products.

Customer Satisfaction Indexes by Type unit: points

CSI

DSI

RSI

Area

aS centers

Designated Repair Shops (Blue hands/auto Q)

Other repair shops

customers

Total

aS parts Dealers

Repair Shops

2012

88.5

92.5

94.0

-

91.8

80.2

77.3

2013

64.0

73.3

73.8

71.3

69.5

77.1

72.9

2014

73.3

87.2

-

75.1

80.3

78.3

80.5

Change (%)

14.5

19.0

-

5.3

15.5

1.6

10.4

CS Training Performance Results

Offline Training

Online training

Total

head office

auto parts dealers

parts sales business centers and repair shops

content production

parts sales business centers

Subjects

cS special lectures, new employee orientation

cS management course for agency heads, cS special lectures

cS special lectures, cS clinic, customer response skills, cS leadership

Three courses

customer response manuals, cS mindset, Win-Win partnerships/cooperatives mindset

No. of Trainees

559

1,053

925

-　

120

2,657

Training Hours

2,431

8,216

3,100

23

120

13,890

Overseas Dealerships/Dealer Training unit: persons

Online

Offline

Description

On-demand training courses online (basic knowledge & components information, management process)

Training dealerships/dealers as auto parts specialists (sales/marketing & inventory/logistics)

course name

Performance Results

2014

364

174

apeX+

2013

224

250

ipOT

2012

296

87

ipOT

VOC Handling Process

Parts Requests

nationwide operations

Quality Control

CS Activities

Related department(s) at headquarters

SMART System

customer Service Team

customer inquiries (all communication details saved on a master database)

customers

Shortage Analysis Database

Parts Supply Feedback

4-3. WIN-WIN PARTNERSHIPS

CP Evaluation Grades

Results

2012

BBB

2013

a

2014

a

Number of Domestic Primary Suppliers unit: companies

2014

2013

2012

869

859

899

Seven Beautiful Pledge Performance Results

Since 2010, mOBiS has integrated all division-level separate initiatives for win-win partnerships into a

companywide shared commitment called the Seven Beautiful pledges. allowing a more systematic ap-

proach to win-win partnerships with suppliers, this program supports our suppliers in establishing their

own competencies, which in turn contributes to our own product competitiveness.

Seven Beautiful Pledge Performance Results

Loan Support to Suppliers

R&D Collaboration

Support to Secondary/Tertiary Suppliers

Support of Training Programs

Communication with Suppliers

Promotion of Ethics Management and Fair Transactions with Suppliers

Performance Sharing and Other Mutually Beneficial Cooperation Efforts

loan guarantees

Suppliers

Sharing of the Shanghai Test center

cTO Forums

Sharing of royalty-free intellectual property rights

Supporting mSQ evaluations

Subcontracting

Supporting training programs

no. of trainees

cooperation meetings

cp evaluation results

paying Sme suppliers in cash

Rise in paid customer supply & unit cost

pmi

unit

KRW 100 million

no. of companies

cases

no. of companies

cases

no. of companies /no. of employees

no. of companies

no. of companies

no. of employees

no. of companies

Grade

cash

KRW 100 million

KRW 100 million

2012

374

35

15,098

138

160

166/179

202

901

1,924

164

BBB

Settle-ments in

cash

7,885

81

2013

498

42

18,598

159

160

186/201

403

1,710

2,251

163

a

Settle-ments in

cash

14,551

85

2014

568

42

22,265

152

160

23/23

412

1,648

2,265

173

a

Settle-ments in

cash

16,789

76

• 2011-2013LoanstoSupplierswererecalculatedafterexcludingtheco-contributionwithGroupaffiliates.

• PMI:PartnerManagedInventory

Fair Trade Agreement & Mutual Growth Programs

Period

No. of Signatories

Purchase Amount (KRW 100 millions)

3rd

apr. 1, 2011-Jan. 30, 2012

615

33,522

2nd

Jun. 8, 2010-mar. 28, 2011

629

30,210

4th

Jan. 31, 2012-Jan. 30, 2013

559

30,790

5th

Jan. 1, 2013-Dec. 31, 2013

555

51,434

6th

Jan. 1, 2014-Dec. 31, 2014

443

54,491

R&D Partnership Programs

Sharing of Patent Rights

CTO Forum

Sharing of the Shanghai R&D Center

Sponsoring of Localization Efforts

Filing for Joint Patent Rights

Subsidizing Patent Filing Expenses

Description

purpose: To share mOBiS’s domestic patent rights with suppliers, supporting their technical competitiveness through the free lending of such patented technologies- 2014 results: free sharing of 127 general patents and 33 utility model licenses (MOBIS’s

burden: KRw 31 million annually)

Sharing our R&D directions with suppliers for stronger win-win partnerships (55 cTO forums for 390 participants from 152 partner companies in 2014)

Opening the doors of our Shanghai R&D center and its test equipment to Korean suppliers who followed mOBiS into the chinese market (a total of 127 test devices, including airbag deployment apparatus testers)- 2014 test performance results: 5,364 tests; saved test expenses: KRw 292 million

Seven suppliers participated in 2014 localization projects that involved a transaction volume of KRW 90 million

Filing for joint patent rights on jointly developed technologies and paying all the required expenses to ease suppliers’ liquidity issues - 2014 results: 10 cases filed for joint patents, with KRw 11 million in expenses

Subsidizing suppliers’ filing for patents on its own technologies to help them protect their technical rights - 2014 results: KRw 31 million subsidized for 64 cases at 17 partner companies

Supplier Loans Performance Results

42

35

42

760

892965

374

498568

2012 2013 2014

Funded amount (KRW 100 millions) Total loans (KRW 100 millions) no. of Beneficiaries

• Abovefiguresreflectonlytheprimarysuppliers.

yearly Training Support for Suppliers

1,924

2,251 2,265

901

1,710 1,648

2012 2013 2014

no. of Trainees no. of Suppliers no. of Training courses

25

19

25


4-6. EMPLOyEESall data in the tables below (except for the number of overseas employees) covers only domestic operations as of December 31, 2014.

Global Outreach Performance

Subsidiaries

China

Slovakia

Czech Republic

Dubai

u.S.

India

Activities

children: sponsoring orphanages and underprivileged children, scholarships, Junior Engineering

Classes, Transparent Umbrella campaign

Disaster Relief: donations for restoration assistance from earthquake devastation

children: volunteer activities at orphanages, funded trips for the bereaved children of traffic

accident victims

children: sponsoring junior basketball teams and elementary schools

culture: supporting cultural exchanges

children: sponsoring children in Kenya and Ethiopia

children: sponsoring Catoma Elementary School in Montgomery, Alabama; donating Christmas

gifts through the Angel Tree program

underprivileged: food drives

children: sponsoring elementary schools, donating used personal computers

local communities: subsidizing local toilet improvement initiatives

EASy MOVE: Donation of Assistive Devices to the Mobility-Challenged

Category

Assistive devices for personal mobility

Assistive devices for training in daily living activities

Assistive devices for body positioning

Assistive devices for personal medical treatment

Total

2014 Support

Baby strollers, wheelchairs (active/upright), car seats, elbow straps

automatic height-adjusted desks, Otter Bather chair, pressure-sore prevention mats, toilet seats

Wheelchairs and multifunctional chairs

Standers, oxygen respirators, motor fit pro upper & lower body, adjustable benches set, and safety mats

No. of units

33

18

24

16

91

Happy Move: Volunteerism by Division

No. of Employees

No. of Volunteers

participation Rate

Volunteer Hours

per-employee volunteer hours

2012

6,997

4,949

70.7

14,903

3.01

2013

7,295

3,713

50.9

11,697

1.60

2014

7,373

3,790

51.4

13,041

1.77

Change (%)

1

2

1

11

11

SAFE MOVE: Distribution of Transparent umbrellas

Employee Distribution

External Distribution

Total

2012

No. of umbrellas

29,859

71,223

101,082

No. of Schools

39

119

158

2013

No. of umbrellas

31,910

74,700

106,610

2014

No. of umbrellas

10,551

94,845

105,396

No. of Schools

34

116

150

No. of Schools

-

120

120

Kids Auto Park

MOBIS Subsidies (KRW in millions)

No. of Visitors

2012

53

17,063

2013

77

16,181

2014

88

14,531

Total Value of Direct Purchases from Farms unit: KRW in millions

2014

2013

2012

78

115

91

yearly Social Contribution Expenses (non-consolidated) unit: KRW in millions

2014

2013

2012

15,124

18,153

13,263

Basketball Team Donations unit: KRW 1,000

2014

2013

2012

10,545

12,885

14,680

Employment unit: persons

11,95112,823

22,842

7,181 7,711

14,672

8,170

2012 2013 2014

Domestic Overseas

11.2%

19,13220,534

• Indirecthiringmeansthatthecompanywasobligedtohiredisabledpeopleandhasenteredintoprivilegedcontractswith

shelter-workplaces for the disabled or vocational rehabilitation facilities for the disabled.

• Thefigureswerepreparedinaccordancewiththereportingguidelinesforthehandicappedemploymentlevy.

• Figuresfrom2012and2013werecorrectedfromthepreviousreport,asthereweresomedataerrors.

Disabled Employment unit: persons

104 104217

128 126

79

138

2012 2013 2014

Directly hired indirectly hired Directly hired employee percentage

232 230

1.751.86

1.70

Officer Workers by Job Class unit: persons

Executives

General Managers

Deputy Managers

Managers

Assistant Managers

General Staff and Below

2012

Female

-

-

3

14

64

204

96

315

728

1,263

1,372

1,075

2013

Female

-

1

3

19

70

252

2014

Female

-

1

3

29

74

259

96

341

776

1,404

1,302

1,384

102

377

836

1,633

1,302

1,411

Workforce unit: persons

Executives & Employees

By Position

By Gender

Total

employees

executives

executives

administrative

Researchers

production operators

Others

Female

male

percentage of female employees

Remarks

excluding outsourced staff/advisors/consultants

including the chairman/vice chairman/outside directors

General managers and above

production operators/Technicians

contract-based/Special positions

2012

7,085

96

96

2,869

1,884

2,205

127

682

6,499

9.5

7,181

2013

7,615

96

96

2,964

2,243

2,183

225

813

6,898

10.5

7,711

2014

8,068

102

102

3,473

2,086

2,211

298

888

7,282

10.9

8,170

4-5. SOCIAL CONTRIBuTION

2014 Social Contribution Expenditures Breakdown (non-consolidated) unit: %

education/Research 38

environmental protection 2

Others 9

culture, arts/Sports 11

Social Welfare 36

Global programs 4

Hyundai Motor Group Smile Microcredit Foundation

MOBIS Contribution (KRW millions)

Loans (cases)

Value of Loans (KRW millions)

No. of Loan Products

2012

4,500

1,455

19,300

18

2013

4,500

1,452

16,277

18

2014

-

1,551

16,657

29

• MOBIS’s2014contributionwillbemadein2015.

• Theprevious18productswerediscontinuedin2014and11newproductswereinitiatedthatsameyear,bringingthetotal

product number to 29 for the year.

Overseas Employment by Region unit: persons

Americas

Europe

Asia-Pacific/Others

China

Total

2012

Managerial

635

705

548

1,251

3,139

3,140

3,334

1,170

4,307

11,951

2013

Managerial

725

833

658

1,438

3,654

2014

Managerial

787

910

887

1,660

4,244

3,439

3,615

906

4,863

12,823

3,828

3,858

1101

5,885

14,672

• OverseasemployeesrepresentlocallyhiredemployeesofMOBISoverseassubsidiaries.

• TheGeneralStaffandBelowcategoryincludesemployeesinthe4th-,5th-and6th-gradeclasses.

Job Creation unit: persons

2014

2013

2012

756

418

397

• Thefiguresaboveincludeonly4th-gradeclassjobsandaboveatthepointofrecruitment.


Average years of Service and Retirees

Average years of service

No. of retirees (including retirees by retirement age)

No. of retirees by retirement age

Early severance percentage rate within the third year of service

2012

12.9

152

30

5.7

2013

12.6

159

27

4.9

2014

12.8

126

3

3.1

• Numberofoverseasemployeesreferstothosewhowerehiredlocally.

Retirees unit: persons

Retirement by Age

Early Retirement

General

2012

30

-

122

2013

27

-

132

2014

3

-

123

Remarks

Retiring upon reaching the retirement age

voluntary early retirement by long-term employees

For personal reasons, such as academic or career-related reasons

No. of employees

No. of Spouses & Family Members

Total Amount of Subsidies (KRW in millions)

2012

1,120

1,001

545

2013

1,129

975

614

2014

1,654

1,130

844

• TheoptionalchecksundertheOccupationalSafety&HealthActprovisionsincludeabdominalultrasonographytests,

tumor marker tests, mammography and breast ultrasonography tests, and cervical cancer checks.

Comprehensive Health Check-up Performance

Plants Domestic

Overseas

Parts Sales Offices

Total

Eligible Operations

18

20

27

65

Certified Operations

18

11

27

56

Certification Rate (%)

100

55

100

86

• MostMOBISoperationsarelocatedwithinindustrialcomplexesand,therefore,donothaveaveryhighordirectinfluenceonbiodiversityorecosystems.

ISO 14001 Certification of Domestic Operations

No. of Injuries (persons)

No. of Days Off

Absence Loss Per 10,000 Employees(%)

2012

10

3,326

12

2013

7

2,700

10

2014

4

2,460

8.3

• Absenceslossper10,000employeesreferstothenumberofdaysoflostworkper10,000employeesannually.

Loss Time from Occupational Accidents

no. of employees Qualified for union membership

percentage of membership to Total Work-force

2012

4,674

65.1

2013

4,892

63.4

2014

4,948

60.6

• Newemployeesbecomemembersofthelaborunionassoonastheyjointhecompany,withtheCollectiveBargaining

agreement disqualifying employees who are above the managerial level, labor relations staff, accounting staff, executives

and their secretaries and chauffeurs, standby staff for the Korean Workplace Reserve Forces and civil Defense, employees

in the production control Tower, interns, temporary workers, part-time workers, special-position staff, senior researchers

and those more senior, guards, communications staff, general affairs staff, legal affairs staff, and other employees whom

labor and management have agreed to disqualify.

• IssuessubjecttoadvancednotificationasstipulatedinArticles39and40oftheCollectiveBargainingAgreementare:

mergers, conveyances, and any company-related spin-off, which requires union notification 90 days prior to the event/

outsourcing or contracting of all or part of production, while research and/or auto parts businesses need to give the union

notice 60 days prior to preparing such plans, with the union needing to be told immediately of any reassignments or

retraining of personnel due to business and/or technical reasons.

union Shops

Region

Korea

Change (%)

-13.9

-18.3

2.9

-2.4

40.0

31.9

Raw Materials

2012

344,235

2.041

35,790

0.210

4,404

0.026

2013

361.312

2.063

38,491

0.220

4,520

0.026

2014

311,104

1.686

39,603

0.215

6,329

0.034

Raw Materials

metals

plastics·Rubber

Solvents

use

Total amount

unit cost

Total amount

unit cost

Total amount

unit cost

unit

Tons

Tons/KRW 100 million

Tons


Tons


• GasinputwasincludedintheFuelcategory.The2012and2013figuresweremodifiedduetothecompany’sreorganization.

Region

Domestic

Overseas

Total

Domestic

Overseas

Domestic

Overseas

Overseas

Change (%)

4.2

6.0

5.2

-0.6

5.0

6.0

-0.9

7.2

-5.7

Energy

2012

2,353

2,702

5,055

0.016

2,005

2,341

348

324

37

2013

2,503

3,299

5,802

0.017

2,158

2,862

345

402

35

2014

2,607

3,498

6,105

0.017

2,265

3,034

342

431

33

Raw Materials

energy

electricity

Fuel

Other (steam)

use Amount

Total volume

unit cost

Total volume

unit

TJ

TJ/KRW 100 millions

TJ

Region

국국

Change (%)

-2.7

-7.6

Water Resources

2012

1,115

6.6

2013

1,126

6.4

2014

1,096

5.9

Raw Materials

Water resources

Total Consumption

Total volume

consumption intensity

unit

1,000 tons


Wages and Fringe Benefit Expenses unit: KRW in millions

Total Annual Wages

Per-employee Average Wages

Retirement Benefits

Fringe Benefit Expenses

2012

594,001

85

45,280

108,775

2013

636,460

87

24,691

113,278

2014

693,863

90

50,501

132,165

• WagesandfringebenefitexpensesweretakenfromtheSalesandAdministrativeExpensesandOtherAccountsfromthe

company’s non-consolidated financial statements.

• Newemployeewagesarehigherthanthelegalminimumrate,withMOBISemployeewagesdeterminedsolelyonjob

grades and work conditions, not by gender.

• MOBIShasadoptedadefinedbenefitstypeofcorporatepensionfundforemployees.Theycanchooseeitheralump-sum

payment or retirement pension. The company plans on gradually increasing each employee’s share of the pension so that

their benefits can grow in the future.

2014 Training Expenditures Breakdown

Job competency 37%core values 18%

Global 12%

leadership 33%

Health Check-ups unit: persons

5,8896,487

5,7696,218 6,311

8,356

2012 2013 2014

no. of employees who received a basic health check-up no. of employees who received an optional health check-up

• Adataerrorwascorrectedfromthepreviousreportregardingthenumberofemployeesin2013who

received a basic health check-up.

4-7. ENVIRONMENTAL MANAGEMENT


Greenhouse Gases (GHG)

Region

Domestic

Overseas

Total

Change (%)

4.0

6.1

5.2

-0.5

2012

116,958

133,747

250,705

0.8

2013

124,075

163,118

287,193

0.8

2014

129,091

173,123

302,214

0.8

Emitted Substance

GhG

Emissions Volume

Total volume

Total

unit

tcO2eq

tcO2eq/ KRW 100 millions

Waste & Recycling

Region

Korea

Change (%)

0.1

-5.0

4.2

4.7

0.0

-7.9

2012

20,756

0.12

12,036

58

6

36

2013

16,615

0.09

9,356

56

6

38

2014

16,633

0.09

9,753

59

6

35

Emitted Substance

Waste emissions volume (designated/general)

Recycled amount

Recycling rate

landfill rate

incineration rate

Emissions Volume

Total volume

emissions intensity

Total volume

percentage

unit

Tons


Tons

%

Air Pollutants

Region

Korea

Change (%)

-8.2

-12.8

-

-

-

2012

60

0.4

0.7

1.7

9.7

2013

49

0.3

2.8

2.9

2.7

2014

45

0.2

1.2

1.1

13.1

Emitted Substance

air pollutants

nOx

SOx

particle matter

Emissions Volume

Total volume

emissions intensity

concentration

unit

Tons

kg/KRW 100 millions

ppm

ppm

mg/m3

Water Quality at Wastewater Treatment Facilities

Region

Korea

Change (%)

-

-

-

-

2012

16.5

19.7

11.7

11.3

2013

24.7

34.5

8.5

22.7

2014

23.0

29.6

10.6

18.3

Emitted Substance

BOD (Biological Oxygen Demand)

cOD (chemical Oxygen Demand)

Tn

SS

Emissions Volume

concentration

unit

ppm

ppm

ppm

ppm

Water Pollutants

Region

Korea

Change (%)

9.7

-

2012

19.6

0.12

2013

20.7

0.12

2014

22.7

0.12

Emitted Substance

Water pollutants

Emissions Volume

Total volume

emissions intensity

unit

Tons

kg/KRW 100 millions

4-7. GHG ASSuRANCE STATEMENT

Terms of Engagement

This assurance statement has been prepared for mOBiS Korea.

lloyd’s Register Quality assurance ltd. (lRQa) was commissioned by mOBiS to assure its GhG inventory Report for the calendar year in 2014, which is summarized in Table 1 below (here-

inafter referred to as “the Report”). The mOBiS-related data, as presented in the Report, has been prepared in accordance with the GhG Target management Scheme for quantification and

reporting of greenhouse gas emissions in Korea. The Report relates to direct and indirect GhG emissions.

Management Responsibility

management personnel at mOBiS were responsible for preparing the Report and for maintaining effective internal controls over the data and information disclosed. lRQa’s responsibility

was to carry out assurance engagement on the Report in accordance with our contract with mOBiS. ultimately, the Report has been approved by, and remains the responsibility of, mOBiS.

LRQA’s Approach

Our verification on the Report has been conducted in accordance with Korea’s GhG Target management Scheme. We verified that the Report was prepared in conformity with the guidance

stipulations for verification of greenhouse gas assertions to a reasonable level of assurance. in order to form our conclusions, we have:

•ConductedsitetoursofthefacilitiesandreviewedprocessesrelatedtothemanagementofGHGemissionsdataandrecords

•Interviewedrelevantstaffoftheorganizationresponsibleformanagingandmaintainingrawandconsolidateddata

•Verifiedhistoricaldataandinformationatanaggregatedlevelforthecalendaryearin2014

Level of Assurance & Materiality

The opinions expressed in the assurance Statement have been formed on the basis of a reasonable level of assurance and at a five percent working materiality level.

LRQA’s Opinion

Based on lRQa’s approach, we have found that the GhG data as presented in the GhG emissions inventory Report, and the amount of energy used within the Report, are materially cor-

rect, subject to the following qualifications:

•TheemissionsofsupplierslocatedonMOBIS’spremiseshavebeenincludedwithintheGHGdata.

Dated: march 26, 2015

yoo Sangkeun

On behalf of lloyd’s Register Quality assurance ltd.

17th Floor, Sinsong Building, 67, yeouinaru-ro, yeongdeungpo-gu, Seoul, 150-923, Republic of Korea

lRQa Reference: SeO6014771

Assurance Statement: This document is subject to the provision below: This assurance Statement is only valid when published with the Report to which it refers.

Third Party Liability: lloyd’s Register Quality assurance limited, its affiliates and subsidiaries and their respective officers, employees or agents are, individually and collectively, referred to in this clause as the “lloyd’s

Register Group.” The lloyd’s Register Group assumes no responsibility and shall not be liable to any person for any loss, damage, or expense caused by reliance on the information or advice in this document or howso-

ever provided, unless that person has signed a contract with the relevant lloyd’s Register Group entity for the provision of this information or advice. in that case, any responsibility or liability is exclusively related to the

terms and conditions set out in that contract.

• The2012and2013figuresweremodifiedduetotheredefinitionof“organizationalboundaries.

Scope (as defined within Korea’s GhG Target management Scheme)

Direct GhG emissions

energy indirect GhG emissions

Total GhG emissions

2014

18,381

110,710

129,091

Table 1. GHG emissions as reported in the MOBIS GHG Inventory Report for the calendar year 2014

• DataispresentedintonsofCO2 equivalent.


4-8. INDEPENDENT ASSuRANCE REPORT

1. Principle of Inclusivity: Stakeholder Engagement

The principle of inclusivity articulates that organizations should include stakeholders in the development and achievement of accountable and strategic responses to sustainability. The

assurer verified that mOBiS complied with the inclusivity principle and improved its practices accordingly in 2014. The company separates its stakeholders into eight groups: domestic &

international complete car makers/competitors; employees; suppliers; customers (agencies/end users); investors; government/associations; media/academia/cSR institutes; and local com-

munities. it also operates different channels for communication with each stakeholder group. in particular, the assurer highly respected the company’s efforts to communicate with end

users and reflect their opinions in its business activities.

2. Principle of Materiality: Selection of and Reporting on Material Issues

The principle of materiality dictates that organizations should focus on issues relevant and material to both the organization and their major stakeholders. The assurer found that mOBiS

successfully identified issues relevant and material to the company and its major stakeholders based on a logical materiality analysis process. mOBiS relies on international standards for

stakeholder engagement (i.e. the Five-part materiality model as set forth by the aa1000 SeS [2008]) to run its annual materiality analysis. The 2014 analysis findings finalized eight key

material issues. in the Report, mOBiS presents its progress and major performance results regarding the identified key material issues by allocating an appropriate amount of space and

from a balanced perspective. Regarding this, we suggest mOBiS keep track of all trends and their relevant changes by material issue every year for future reports.

3. Principle of Responsiveness: Organizational Response to Issues

The principle of responsiveness says that organizations should be responsive to issues that may impact stakeholder performance. The assurer found that mOBiS successfully identified all

issues that may impact stakeholder performance, implemented measures to address them, and adequately presented relevant information in the Report. it seems clear that mOBiS is ef-

fectively responding to key material issues and earmarking report pages for its Special Themes, which feature responsive activities and progress information regarding such issues. also, the

company is setting a good example by defining the 10 key risks it faces and specifying which activities play a role in controlling these risks.

Recommendations

While the assurer commends mOBiS for making a variety of efforts to enhance sustainability and for the subsequent performance results, it also presents the following recommendations

for improving future sustainability reports and sustainability management..

1. expand the scope of information disclosure with global sustainability management practices: even though the Report included increased information on the company’s global cSR ac-

tivities compared to the previous report, they were mostly concerned with business areas, such as quality control and production activities. The assurer suggests mOBiS develop a more

detailed roadmap for reinforcing more diversified global sustainability activities and disclosing all related information.

2. Sustainability management target management: mOBiS demonstrated significant improvement in various aspects of its sustainability management activities, but the assurer suggests it

set longer-term goals for more systematic sustainability management activities in consideration of its business environment.

3. Sustainability management regarding the supply chain: as part of the automobile industry, constant management of its supply chain is integral to sustainability for mOBiS. in response

to the growing social need and cSR demands for sustainability management throughout the supply chain, the company should consider long-term collaboration plans with other busi-

nesses and organizations for sustainability management that spans its entire business value chain, including its component suppliers and complete carmakers.

may 2015

Korea productivity center ceO

Hong Soonjik

To All MOBIS Stakeholders

mOBiS commissioned the Korea productivity center (the “assurer”) to provide independent assurance of its 2015 Sustainability Report (the “Report”).

Responsibility and Independence

mOBiS is entirely responsible for the reliability and accuracy of all information and opinions presented in this Report. The assurer is responsible solely for providing third party verification

of the content in the Report. as an independent assurance agency, the assurer was neither involved in the process of preparing this Report with mOBiS, nor in any conflicts of interest that

may undermine our independence.

Assurance Standard

The independent verification process was planned and performed in accordance with the aa1000aS (2008) assurance Standards to provide Type 1 moderate level of assurance. This was

achieved through the evaluation of the organization’s adherence to the aa1000 apS (2008) of inclusivity, materiality and Responsiveness. Furthermore, assurance was performed to ascer-

tain the organization’s adherence to the Global Reporting initiative (GRi) G3.1 Guidelines in preparing and presenting sustainability performance information.

Assurance Limitations

Based on the aforementioned assurance standards, the assurer verified the organization’s sustainability performance in 2014. The reliability of financial data in the Report was verified by

crosschecking financial statements and disclosure information (as it was audited by an independent auditor), with some data, such as GhG data and information linked with the company’s

website, verified for its reliability by referring to a third party assurance statement. Site inspection was also performed, in a limited scope, on mOBiS’s headquarters in Seoul. as a result,

the assurer clearly states that any future verification may produce varied results.

Assurance Methodology

The assurance was undertaken with the methodology specified below:

1. We verified if the Report satisfies the requirements of the GRi G4 Guidelines’ core Options.

2. We verified consistency with the principles dictating the content and quality of the Report based on GRi G4 Guidelines.

3. We verified objectivity and appropriateness of all selected key issues and content in the Report by reviewing media reports and performing benchmark analysis.

4. We verified any inconsistencies and errors with the information presented in the Report by comparing and analyzing the same information from different sources.

5. We verified the validity of sustainability strategies and report content by interviewing staff members in charge from the report preparation task force and working-level employees from

all related departments.

6. We verified the basis of data and information collection by performing onsite inspection at mOBiS’s headquarters in Seoul, and also verified all internal processes and systems.

Findings and Conclusions

it is the assurer’s opinion that the Report presents mOBiS’s sustainability efforts and performance results in a fair and accurate way. in addition, the assurer verified the core Option re-

quirements for the GRi G4 Guidelines’ General Standard Disclosures, and reviewed all specific standard disclosures of material issues against the disclosure on management approach (Dma)

and indicators as identified from the process of determining report content as follows:.

The Korea productivity center’s Sustainability management center is an assurance agency officially certified by accountability (the organization that established aa1000), the international standard for stakeholder

participation and verification, and is qualified to conduct independent assurance statements. Our assurance committee is comprised of competent experts who have in-depth experience in sustainability management

consulting and assurance, and have completed all relevant training.

· aa1000aS (2008): The aa1000 assurance Standard (2008) is an international assurance standard established by accountability, and provides detailed information on the method of reporting sustainability manage-

ment issues by evaluating an organization’s management on performance, compliance with principles, and reliability of performance information.

· aa1000apS (2008): The aa1000 accountability principles Standards (2008) is an international assurance standard set by accountability, and features all principles related to aa1000 standards.

Topic

Leading global technology competencies

Achieving the highest possible quality of products

Mutual growth

Risk management

Increasing the order backlog from global customers

Human resource development

Health and welfare

Social outreach activities

Aspects

non-GRi

product/Service labeling

procurement practices

hampering fair competition

assessment of suppliers’ labor practices

Suppliers’ impact on human rights

assessment of suppliers’ social impact

economic performance

anti-corruption

non-GRi

Training & education

Occupational health & safety

local communities

handling grievances related to social impact

Indicators

pR5

ec9

SO7

la14, la15

hR10, hR11

SO9, SO10

ec2

SO3~SO5

la10~la11

la5~la8

SO1~SO2

SO11

Kim Dongsoo,

head of the Korea productivity center

Lee Kihwan,

Team leader

Park Taeho,

Team leader


4-9. GRI INDex

Fully reported partially reported not reported na: not applicable Fully reported partially reported not reported na: not applicable

Indicator G4 Page NoteManagerial Issues Report Contents

Corporate Overview

Indicator G4 Page NoteRemarkManagerial Issues Report Contents

Strategy and

Analysis

Organizational

Profile

Identified

Material Aspects

And Boundaries

Stakeholder

Engagement

Report Profile

Governance

Ethics and

Integrity

G4-1

G4-2

G4-3

G4-4

G4-5

G4-6

G4-7

G4-8

G4-9

G4-10

G4-11

G4-12

G4-13

G4-14

G4-15

G4-16

G4-17

G4-18

G4-19

G4-20

G4-21

G4-22

G4-23

G4-24

G4-25

G4-26

G4-27

G4-28

G4-29

G4-30

G4-31

G4-32

G4-33

G4-34

G4-35

G4-36

G4-37

G4-38

G4-39

G4-40

G4-41

G4-42

G4-43

G4-44

G4-45

G4-46

G4-47

G4-48

G4-49

G4-50

G4-51

G4-52

G4-53

G4-54

G4-55

G4-56

G4-57

G4-58

6~7

6~7, 15~16

3~4

3~4

3~4

3~4

11~12

43

3~4, 41~43, 71

75

76

44~47

no change

13~16

70

70

3~4

2

18

18

18

Reasons for change to data are

stated on each page.

no change

17

17

17~18

18

2

2

2

85

82~84

80~81

11~12

11~12

11~12

11~12

12

11

12

12

11~12

11~12

11~12

11~12

11~12

11~12

12

11~12

18

11

8~9

13~14

13~14

http://www.mobis.co.kr,

http://www.mobis.co.kr, http://dart.fss.or.kr



Business ethics, Risk management

(http://dart.fss.or.kr) See 38th Business Report

http://dart.fss.or.kr

Subcommittees are operated under the BOD. Their

members are appointed from the BOD members

according to their respective experts.

audit committee and ethics committee

compensations are made based on the BOD’s perfor-

mance as reported to the General Shareholders’ meeting.

Statement from the most senior decision-maker

provides a description of Key impacts, risks, and opportunities

Report the name of the organization

The primary brands, products, and services

The location of the organization’s headquarters

The number of countries where the organizaion operates, and names of countries where either the organization has significant operations or that are

specifically relevant to the sustainability topics covered in the report

The nature of ownership and legal form

The markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries)

Scale of the organization

Total workforce

The percentage of total employees covered by collective bargaining agreements

The organization’s supply chain

any significant changes during the reporting period regarding the organization’s size, sutructure, ownerhsip, or its supply chain

Whether and how the precautionary approach or principle is addressed by the organization

list externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses

memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization

list all entities included in the organization’s consolidated financial statements or equivalent documents

The porcess for defining the report content and the aspect Boundaries

list all the material aspects identified in the process for defining report content

For each material aspect, report aspect Boundary within the organization

For each material aspect, report the aspect Boundary outside the organization

The effect of any restatements of information provided in previous reports, and the reasons for such restatements

Significant changes from previous reporting periods in the Scope and aspect Boundaries

list of stakeholder groups engaged by the organization

Basis for identification and selection of stakeholders with whom to engage

Organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group

Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and

concerns, including through its reporting

Reporting period such as fiscal or calendar year) for information provided

Date of most recent previous report (if any)

Reporting cycle such as annual, biannial)

provide the contact point for questions regarding the report or its contents

Report the ‘in accordance’ option the organization has chosen

Report the organization’s policy and current practice with regard to seeking external assurance for the report

Report the governance structure of the organization, including committees of the highest governance body

Report the process for delegating authority for economic, environmental and social topics from the highest governance body to senior executives and other employees

Report whether the organization has appointed an executive-level position or positions with responsibility for economic, environmental and social topics,

and whether post holders report directly to the highest governance body

Report processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics if consultation is

delegated, describe to whom and any feedback processes to the highest governance body

Report whether the chair of the highest governance body is also an executive officer (and, if so, his or her function within the organization’s management

and the reasons for this arrangement)

Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting

highest governance body members

Report processes for the highest governance body to ensure conflicts of interest are avoided and managed

Report the highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or

mission statements, strategies, policies, and goals related to economic, environmental and social impacts

Report the measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics

Report the processes for evaluation of the highest governance body’s performance with respect to governance of economic, environmental and social topics

Report the highest governance body’s role in the identification and management of economic, environmental and social impacts, risks, and opportunities

Report the highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social topics

Report the frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities

Report the highest committee or position that formally reviews and approves the organization’s sustainability report and ensures that all material aspects are covered

Report the process for communicating critical concerns to the highest governance body

Report the nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve them

Report the remuneration policies for the highest governance body and senior executives

Report the process for determining remuneration Report whether remuneration consultants are involved in determining remuneration and whether they

are independent of management Report any other relationships which the remuneration consultants have with the organization

Report how stakeholders’ views are sought and taken into account regarding remuneration, including the results of votes on remuneration policies and

proposals, if applicable

Report the ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median

annual total compensation for all employees (excluding the highest-paid individual) in the same country

Report the ratio of percentage increase in annual total compensation for the organization’s highest-paid individual in each country of significant

operations to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual) in the same country

Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics

Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to organizational integrity, such as

helplines or advice lines

Report the internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity,

such as escalation through line management, whistleblowing mechanisms or hotlines

ec1

ec2

ec3

ec4

ec5

ec6

ec7

ec8

ec9

41

35~36

76

28

76

75

44~46, 52~57, 72, 74

41

eco-friendly technologies

corporate pension (defined benefits type) fund is

in place.

mOBiS received government subsidies worth

KRW 4,160 million in 2014 for national projects.

Overseas workforce

Direct econmic value generated and distributed

Financial implications and other risks and opportunities for the organization’s activities due to climate change

coverage of the organization’s defined benefit plan obligations

Financial assistance received from government

Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

proportion of senior management hired from the local community at significant locations of operation

Development and impact of infrastructure investments and services supported

Significant indirect economic impacts, including the extent of impacts

proportion of spending on local suppliers at significant locations of operation

Economic Performance Indicators

Economic

Performance

Market Presence

Indirect Economic

Impacts

Procurement

Practices

Materials

Energy

Water

Boidiversity

Emissions

Effluents and

Waste

Products and

Services

Compliance

Transport

Overall

Supplier

Environmental

Assessment

Environmental

Grievance

Mechanisms

en1

en2

en3

en4

en5

en6

en7

en8

en9

en10

en11

en12

en13

en14

en15

en16

en17

en18

en19

en20

en21

en22

en23

en24

en25

en26

en27

en28

en29

en30

en31

en32

en33

en34

65

67

65~66

65~66

66, 77

66

35~36

66, 77

66

66

66

57

65, 67

65, 66

65

67

68

70, 78

78

78

70

67~68

35~36

67

70

67

45

45

GhG emissions reduction initiatives

materials used by weight or volume

percentage of materials used that are recycled input materials

energy consumption within the organization

energy consumption outside of the organization

energy intensity

Reduction of energy consumption

Reductions in energy requirements of products and services

Total water withdrawal by source

Water sources significantly affected by withdrawal of water

percentage and total volume of water recycled and reused

Operational sites owned, leased, managed in, or adjacent to, protected areas

Description of significant impacts of activities, products, and services on Biodiversity

habitats protected or restored

Total number of iucn red list species and national conservation list species with habitats in areas afected by operaions, by level of

extinction risk

Direct greenhouse gas(GhG) emissions (scope 1)

energy indirect greenhouse gas(GhG) emissions (scope 2)

Other indirect greenhouse gas(GhG) emissions (scope 3)

Greenhouse gas (GhG) emissions intensity

Reduction of greenhouse gas(GhG) emissions

emissions of ozone-depleting substances (ODS)

nox, Sox, and other significant air emissions

Total water discharge by quality and destination

Total weight of waste by type and disposal method

Total number and volume of significant spills

Weight of trnsported, imported, exported, or treated waste deemed hazardous

identity, size, proteted status, and biodiversity value of water bodies and realted habitats significantly affected by the organization’s

discharges of water and runoff

extent of impact mitication of environmental impacts of products and services

percentage of porducts sold and their packaging materials that are reclaimed by category

monetary value of significatn fines and total number of non-monetary sanctions for non-compliance with environmental laws and regluations

Significant environmental impacts of transporting products and other goods and materials ofr the organization’s operations,, and

transporting members of the workforce

Total environmental protection expenditures and investments by type

percentage of new suppliers that were screened using enviromental criteria

significant actual and potential engative environmental impacts in the supply chain and actions taken

number of grievances about environmental impacts filed, addressed, and resolved through formal grievnce mechanisms

Environmental Performance Indicators

Remark

84 mobis sustainability report 2015

The 2015 mOBiS Sustainability Report was printed on eco-friendly paper certified by the FSc using soybean-based ink.

Publishing Date | may 2015 Publisher | chung myungchul Publisher | mOBiS Production/Design | intonation+82-2-3144-0133

For any questions or suggestions regarding this report, please contact the mOBiS cSR Team at 02.2018.5204 or by email at [email protected]

Indicator G4 Page NoteRemarkManagerial Issues Report Contents

Labor Practice and Decent Work Performance Indicators

la1

la2

la3

la4

la5

la6

la7

la8

la9

la10

la11

la12

la13

la14

la15

la16

76

76

62

76

76

62~63

62~63

60

60

59

11

76

45

45

　

　

Society Performance Indicators

Local Communities

Anti-corruption

Public Policy

Anti-competitive

Behavior

Compliance

Supplier Assessment for

Impacts on Society

Grievance Mechanisms

for Impacts on Society

SO1

SO2

SO3

SO4

SO5

SO6

SO7

SO8

SO9

SO10

SO11

52~57

n/a

13

14

14

prohibited by law

47, 70

70

45

44

70

　percentage of operations with implemented local community engagement, impact assessments, and development programs

Operations with significant actual and potential negative impacts on local communities

Total number and percentage of operations assessed for risks related to corruption and the significant risks identified

communication and training on anti-corruption policies and procedures

confirmed incidents of corruption and actions taken

Total value of political contributions by country and recipient/beneficiary

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

percentage of new suppliers that were screened using criteria for impacts on society

Significant actual and potential negative impacts on society in the supply chain and actions taken

number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms

Responsibility Performance Indicators

Customer Health and

Safety

Product and Service

Labeling

Marketing

Communications

Customer Privacy

Compliance

pR1

pR2

pR3

pR4

pR5

pR6

pR7

pR8

pR9

50, 37~38

70

49, 73

70

73

70

70

no such cases in point

70

　percentage of significant products and services categories for which health and safety impacts are assessed for improvement

Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and

services during their life cycle, by type of outcomes

Type of product and service information required by the organization’s procedures for product and service information and labeling, and

percentage of significant products and services subject to such information requirements

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

Results of surveys measuring customer satisfaction

Sale of banned or disputes products

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising,

promotion, and sponsorship, by type of outcomes

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Fully reported partially reported not reported na: not applicable

Employment

Labor/Management

Relations

Occupational Health

and Safety

Training and Education

Diversity and Equal

Opportunity

Equal remuneration for

women and men

Supplier Assessment for

Labor Practices

Labor Pracitces Grievance

Mechanisms

Total number and rates of new empoyee hires and empoyee turnover by age group, gender, and region

Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation

Return to work and retention rates after parental leave, by gender

minimum notice periods regarding operational changes, including whether these are specified in collective agreements

percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on

occupational health and safety programs

Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender

Workers with high incidence or high risk of diseases related to their occupation

health and safety topics covered in formal agreements with trade unions

average hours of training per year per employee, by gender, and by employee category

programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

percentage of employees receiving regular performance and career development reviews, by gender and by employee category

composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group

membership, and other indicators of diversity

Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation

percentage of new suppliers that were screened using labor practice criteria

Significant actual and potential negative impacts for labor practices in the supply chain and actions taken

number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms

Human Rights Performance Indicators

hR1

hR2

hR3

hR4

hR5

hR6

hR7

hR8

hR9

hR10

hR11

hR12

45

14, 67

n/a

61

70

70

14

　

13~14, 61

45

　

63

　Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations,

including the percentage of employees trained

Total number of incidents of discrimination and corrective actions taken

Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant

risk, and measures taken to support these rights

Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor

Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the

elimination of all forms of forced or compulsory labor

percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations

Total number of incidents of violations involving rights of indigenous peoples and actions taken

Total number and percentage of operations that have been subject to human rights reviews or impact assessments

percentage of new suppliers that were screened using human rights criteria

Significant actual and potential negative human rights impacts in the supply chain and actions taken

number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms

Investment

Non-discrimination

Freedom of Association

and Collective Bargaining

Child Labor

Forced of Compulsory

Labor

Security Practices

Indigenous Rights

Assessment

Supplier Human Rights

Assessment

Human Rights Grievance

Mechanisms

mobis Csr team

203, teheran-ro, Gangnam-gu, seoul, 135-977 Korea

Tel +82-2-2018-5204 Fax +82-2-2173-6715

e-mail [email protected]

en.mobis.co.kr

Documents

MOBIS Sustainability Report 2015